MW The U.S. automakers build, assemble and use parts from Canada and Mexico. GM, Ford and Stellantis shares slammed.

By Steve Goldstein

Shares of the Big Three automakers slumped on Monday in premarket trade as the impact of 25% tariffs on Canada and Mexico hit the companies hard.

General Motors $(GM)$ shares fell 6%, as Stellantis $(STLA)$ (IT:STLAM) shares fell 5% in premarket trade and Ford Motor Co. $(F)$ lost 4%. Stellantis makes Chrysler and Ram Truck vehicles.

S&P Global last week assessed the impact. They point out in 2024, the U.S. imported 3.6 million vehicles from Canada and Mexico, representing 22% of the total sold last year - those include full-size pick-up trucks from GM and Stellantis, and the Toyota $(TM)$ RAV4.

Also, many U.S.-built vehicles use Canadian or Mexican sourced propulsion systems and components - like the Ford F-series pick-ups, Mustang cars and the Mazda CX-50.

The company in the U.S. market most exposed is actually Volkswagen, with 43% of sales sourced from Mexico. VW shares (XE:VOW3) declined sharply in Frankfurt trade.

A 25% duty on the average $25,000 landed cost of a vehicle from Mexico and Canada would add $6,250, S&P said, which expects most of the tariff cost to be passed onto consumers. But most vehicles made in the U.S. also would rise because of the free flow of components across borders, S&P said.

-Steve Goldstein

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February 03, 2025 04:59 ET (09:59 GMT)

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