General Motors (GM) stock plummeted 5% in pre-market trading on Tuesday, following the implementation of new U.S. tariffs on imports from Mexico and Canada that are expected to disrupt the automaker's integrated supply chain and manufacturing operations across North America.
The new 25% tariffs on goods from Mexico and Canada, along with an additional 10% levy on Chinese imports, were enacted by the Trump administration on Monday in an escalation of the ongoing trade war. These tariffs pose a significant threat to GM and other major automakers that have deeply integrated their production lines with the U.S.'s neighboring countries over decades of free trade.
With approximately 15% of parts for U.S.-destined GM vehicles coming from Mexico, and an undisclosed but substantial amount from Canada, analysts warn that the tariffs could substantially increase production costs and ultimately prices for car buyers. GM, Ford, and Stellantis have already urged the administration to exempt automakers complying with existing free trade agreements from the new tariffs, citing the potential to wipe out billions in industry profits.
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