Auto manufacturers' shares fell early Thursday as US President Donald Trump imposed 25% tariffs on imports of automobiles and certain auto parts.

Trump signed a proclamation late Wednesday to implement tariffs on imported passenger vehicles, including sedans and sport utility vehicles, as well as key auto parts such as engines, transmissions and electrical components. The duties could be expanded to additional parts if deemed necessary by the White House.

The new tariffs on cars and light trucks are expected to take effect April 3, Reuters reported. The move is part of the Trump administration's plan to end "unfair trade practices" and ensure the US can sustain its domestic industrial base while meeting national security needs, a statement from the White House said.

Shares of US auto giants Ford Motor (F) and General Motors (GM) dropped 2.9% and 5.4%, respectively, in premarket activity, while Chrysler and Jeep parent Stellantis' (STLA) New York stock exchange-listed shares slipped 1%. The companies didn't immediately respond to MT Newswires' requests for comment.

The tariffs are expected to be a "hurricane-like" headwind to foreign and many US automakers, and could result in vehicle price increases, Wedbush Securities said in a Wednesday client note. The brokerage projects GM and Ford to be under some pressure as they import many parts and carry out production in Mexico, while Tesla (TSLA) is less likely to be impacted as its production and assembly are in the US.

"We continue to believe this is some form of negotiation and these tariffs could change by the week although this initial 25% tariff on autos from outside the US is almost an untenable head scratching number for the US consumer," Wedbush analysts led by Daniel Ives wrote in the note.

The government will allow importers under the US-Mexico-Canada agreement to certify their US content, while systems will be implemented where the tariffs will only apply to the value of their non-US production.

"In recent years, American-owned automotive manufacturers have experienced numerous supply chain challenges, including material and parts input shortages, labor shortages and strikes, and electrical-component shortages," Trump said in the proclamation statement. "Meanwhile, foreign automotive industries, propelled by unfair subsidies and aggressive industrial policies, have grown substantially."

In a separate statement, European Commission President Ursula von der Leyen criticized the tariffs, saying they're bad for businesses and worse for US and European Union consumers. "We will now assess this announcement, together with other measures the US is envisaging in the next days," von der Leyen said. "The EU will continue to seek negotiated solutions, while safeguarding its economic interests."