Auto stocks are digesting President Donald Trump’s announcement that he would place 25% tariffs on “all cars that are not made in the United States,” as well as certain automobile parts.
Trump’s administration had been telegraphing plans to put tariffs on the auto industry, but the effect of those moves and mechanism for enforcement are starting to take shape. The President’s executive order said the tariffs would take effect for vehicles on April 3 and for auto parts by May 3.
Shares of the “Detroit Three” all fell. General Motors stock dropped move than 7%, while Stellantis and Ford Motor shares lost roughly 1% and more than 3%, respectively. Shares of Tesla, however, were mostly unchanged.
“In our coverage, for [original equipment manufacturers], Tesla and Ford appear to be the most shielded given location of vehicle assembly facilities although Ford does face incremental exposure on imported engines,” Deutsche Bank analysts wrote in a note Thursday. “GM has the most exposure to Mexico.”
Trump said Wednesday he would not put a tariff on vehicles that are built in the U.S.
The tariffs apply to imported passenger vehicles and light trucks, as well as key automobile parts including engines and transmissions, the White House said in a fact sheet.
Some aspects of the tariffs are still getting worked out. Auto parts that are compliant with the United States-Mexico-Canada-Agreement will remain tariff-free until the commerce secretary can consult with the U.S. Customs and Border Protection to figure out how to apply tariffs to non-U.S. content.
