By Katherine Hamilton

Honda, General Motors, Nissan and Stellantis have the highest exposure to proposed tariffs in Canada and Mexico, Fitch Ratings said in a note Monday.

The automakers have a particularly larger share of vehicles imported to the U.S. from the two countries, putting them at greater risk of the 25% tariffs on Canada and Mexico, which have been put on pause while the countries negotiate.

Out of the companies Fitch watches, General Motors has the highest number of imports from Mexico with about 18% of its products produced there as of 2024. Toyota and Honda have the most produced in Canada, at just under 12% and 9% respectively. Fitch Ratings previously downgraded its outlook for Nissan and Stellantis to negative due to lower profitability and cash flows from declining North American sales.

Tariffs would put pressure on the credit metrics of some global car manufacturers, the credit rating agency said. The duties on Mexican products would have the largest impact on the industry, followed by China. The tariffs against China are likely to have a limited effect since the industry has been relying less on the country's supply chain, Fitch said.

Companies' ability to mitigate the tariffs' effects will depend on how much they import from Mexico and Canada, how much they pass the extra cost of tariffs onto customer prices and whether they cut costs or reroute shipments. Most businesses likely won't change the location of production sites until there is more clarity about whether tariffs will be implemented, Fitch said.

Write to Katherine Hamilton at katherine.hamilton@wsj.com

(END) Dow Jones Newswires

February 10, 2025 10:07 ET (15:07 GMT)

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