Automaker stocks are down after Donald Trump announced that he would place a 25 percent tariff on "all cars that are not made in the United States," as well as on certain car parts.
The Trump administration's decision falls in line with previous threats of tariffs, but those warnings are only now solidifying. Under Trump's latest executive order, the tariffs will kick in on vehicles on April 3, and for auto parts on May 3.
The "Detroit Three" automakers all saw declines by the time the 4 p.m. stock market bell rang on Thursday.
General Motors shares fell more than 7 percent, while Ford dropped approximately 4 percent, and Stellantis was down 1.25 percent. Tesla added 0.4 percent as it has significant production based in the U.S.
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, according to CNBC. “GM has the most exposure to Mexico.”
Trump's tariffs only apply to imported passenger vehicles, and the later tariffs to some auto parts including transmissions, according to the White House.
Auto parts that fall in line with the U.S.-Mexico-Canada Agreement will remain free of tariffs, at least until the U.S. Secretary of Commerce can consult with U.S. Customs and Border Protection to determine how to apply tariffs to those products.
Ferrari announced on Thursday that it planned to increase the prices of some of its models by up to 10 percent in response to the tariffs, according to the Wall Street Journal.
Members of the United Auto Workers union praised the move.
“These tariffs are a major step in the right direction for autoworkers and blue-collar communities across the country, and it is now on the automakers, from the Big Three to Volkswagen and beyond, to bring back good union jobs to the U.S.,” UAW president Shawn Fain said in a statement after the tariffs were announced.
Matt Blunt, the former governor of Missouri and the current president of the American Automotive Policy Council — which represents major American car makers like Ford, GM, and Stellantis — issued a statement praising the tariffs, but adding a note of caution.
The statement noted that the council is “committed to President Trump’s vision of increasing automotive production and jobs in the U.S. and will continue to work with the Administration on durable policies that help Americans.” But he emphasized that tariffs should only be used in a way that "avoids raising prices for consumers and that preserves the competitiveness of the integrated North American automotive sector.”
Most if not all tariffs on goods imported into the U.S. are often passed on to the American consumer.
Georgia bill to codify IVF moves ahead
Democrats can’t keep up with Trump’s ‘flood the zone’ deportation strategies
Australia's prime minister has survived a volatile political era
What is 'classified' information? What are 'secure' communications? Here's a primer
Trump withdraws Stefanik’s UN ambassador nomination over fears for GOP majority: Live
RFK Jr is axing 10,000 employees at Health Department in dramatic restructuring
