A 25% tariff on all cars not made in the United States will take effect on April 3 for vehicles and May 3 for auto parts. This tariff applies to imported passenger vehicles, light trucks, and key automobile parts like engines and transmissions. Following the announcement, General Motors stock fell by about 8%, Stellantis by nearly 4%, and Ford Motor by 2%. In contrast, Tesla’s shares rose by nearly 2%. According to Deutsche Bank analysts, Tesla and Ford are less affected due to their vehicle assembly locations, though Ford faces risks with imported engines. General Motors has significant exposure in Mexico. Vehicles consist of an average of 20,000 parts, sourced from 50 to 120 countries. S&P Global Mobility reports that 25 automakers produce an average of 63,900 light-duty passenger vehicles daily in North America, with 65% assembled in the U.S., 27% in Mexico, and 8% in Canada. Goldman Sachs analysts estimate that the tariff could increase the price of imported cars by $5,000 to $15,000. If 50% of parts in a U.S.-made car are foreign, the tariff might raise their price by $3,000 to $8,000. A one-month tariff exemption was previously granted for vehicles complying with the United States-Mexico-Canada Agreement’s trade rules.
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