Trump’s 25% Auto Tariffs Hit GM and Ford Stocks; Not Tesla

27 Mar at 2:00 pm

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Trump’s 25% Auto Tariffs Hit GM and Ford Stocks; Not Tesla/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Major automaker stocks dropped after President Trump announced 25% tariffs on imported vehicles. General Motors took the biggest hit, while Tesla rose as it avoids overseas production. Analysts warn the tariffs may push car prices higher and add inflation pressure.

FILE – This is the grill on a GMC Sierra Heavy Duty Denali HD 2500 truck on display at the Pittsburgh International Auto Show in Pittsburgh, Feb. 15, 2024. (AP Photo/Gene J. Puskar, File)

Trump Auto Tariffs Impact Auto Stocks Quick Looks

Trump announces 25% tariffs on imported vehicles, effective April 3
GM shares drop 6.8%, most exposed due to North American sourcing
Ford, Honda, Toyota, Stellantis also post losses
Tesla gains over 3% as all U.S. sales are domestically made
Auto parts suppliers like Autoliv, Aptiv, Gentex also decline
Tariffs expected to raise vehicle prices and pressure inflation
Automakers had begun stockpiling inventory ahead of the policy
Industry braces for long-term changes in production strategy

A line of unsold 2024 Edge utility vehicles sit at a Ford dealership Sunday, May 19, 2024, in Denver. Policymakers’ willingness to keep their key rate at a two-decade peak — thereby keeping costs painfully high for mortgages, auto loans and other forms of consumer borrowing — carries its own risks.(AP Photo/David Zalubowski)

Trump’s 25% Auto Tariffs Hit GM and Ford Stocks; Not Tesla

Deep Look

Shares of major global automakers slumped on Wednesday after President Donald Trump formally announced a 25% tariff on imported vehicles, a move that sent shockwaves across the auto industry and sparked new concerns about rising consumer costs and production disruptions.

The tariffs, set to take effect on April 3, are part of Trump’s latest effort to bolster domestic manufacturing and reduce reliance on foreign production. However, the announcement triggered immediate volatility in automotive stocks, as most major carmakers rely heavily on cross-border supply chains and overseas manufacturing to meet U.S. demand.

General Motors saw the steepest decline, with shares falling 6.8%. Analysts at JPMorgan said GM is particularly vulnerable, as approximately 40% of its U.S. vehicle sales come from units manufactured in Mexico and Canada. The tariffs threaten to significantly raise production costs for the company.

Ford’s shares dipped 2.1%. While the Detroit automaker is less exposed to foreign manufacturing—with less than 10% of its U.S. vehicle inventory sourced from abroad—it still faces broader supply chain challenges due to the interconnected nature of the auto industry.

Stellantis, the multinational car company headquartered in the Netherlands with key North American operations, fell 2.3%. Japanese automakers were also impacted: Honda’s U.S.-traded shares dropped 2.2%, while Toyota’s slid 2.5%.

Tesla, however, defied the downward trend. The electric vehicle maker saw its stock rise over 3%, benefiting from the fact that all vehicles it sells in the United States are produced domestically. Despite that gain, Tesla’s share price remains down more than 30% year-to-date, with overall sales lagging in major global markets.

Auto parts manufacturers were also hit hard. Autoliv dropped 3.7%, Aptiv lost 5.7%, and Gentex fell 2.3%, reflecting broader concern over the ripple effects of the tariffs on the entire automotive supply chain.

UBS analyst Joseph Spak warned that “if these tariffs remain in place, we see vehicle prices going higher to help offset the cost.” Consumers are already facing steep prices: the average cost of a new vehicle was $48,039 in February, according to Kelley Blue Book—a figure just shy of the all-time high reached in 2022.

Other car ownership expenses, such as insurance and repairs, have also been climbing steadily since 2024. With inflation still a concern heading into the second quarter of 2025, economists worry the tariffs could reignite upward pricing pressure, worsening affordability issues for American drivers.

Automakers had been bracing for tariff impacts since Trump reignited his trade war rhetoric in early February. Companies like GM worked to import additional inventory ahead of the deadline, a short-term strategy that may not be sustainable.

“If they become permanent, then there’s a whole bunch of different things that you have to think about in terms of where do you allocate plants and do you move plants,” said GM Chief Financial Officer Paul Jacobson during a February investor conference.

Trump has made it clear that this new wave of auto tariffs is here to stay. He contends that the policy will incentivize carmakers to build more factories in the United States, supporting domestic jobs and reducing reliance on foreign manufacturing.

Jacobson cautioned, however, that long-term uncertainty could hinder business planning: “As much as the market is pricing in a big impact of tariffs and lost profitability, think about a world where on top of that, we’re spending billions of dollars in capital, and then it ends,” he said. “So we can’t be whipsawing the business back and forth.”

With less than a week before the tariffs go into effect, automakers, investors, and economists alike are closely watching how companies will restructure their production and whether consumers will soon face even higher sticker prices.