Trump's Threat of 25% Tariff on Mexico and Canada Causes Automaker Shares to Fall

• On Tuesday, the automaker's stock price dropped after President-elect Trump threatened a 25% tariff on goods from Mexico and Canada.
• In Mexico and Canada, there are significant manufacturing operations by companies such as General Motors and Stellantis.
• During his first term, Trump had reached a regional trade deal, which was anticipated to be renegotiated by him.

The stock prices of automakers dropped on Tuesday morning following President-elect Trump's threat to impose a 25% tariff on imported goods from Canada and Mexico into the US.

The automotive industry has utilized Mexico for lower cost vehicle production since the North American Free Trade Agreement was implemented in 1994. Most major U.S. automakers have factories in Mexico, with GM and Stellantis producing full-size pickup trucks there.

Stellantis, which has four major plants in the countries, saw its shares drop more than 4% on Tuesday. Shares of the company with less exposure in the countries fell nearly 2%. Shares of Stellantis and others with production in Mexico also dropped at least 1%.

Trump declared that he will impose a 25% tariff on all imports from Canada and Mexico through an executive order on his inauguration day, January 20. Additionally, he announced plans to increase tariffs on Chinese goods entering the U.S. by 10%.

The tariffs proposed by the administration would be more aggressive than anticipated, ending the regional free trade agreement that was negotiated during the first term to replace the North American Free Trade Agreement.

Both Trump and Democrats agreed that the trade deal must be modified to address potential plans for Chinese manufacturers like BYD.

During his campaign, Trump suggested imposing a more than 200% duty or tax on imported vehicles from Mexico. He also threatened to increase tariffs on European vehicles, as he had done during his first term in office.

This is developing news. Please check back for additional updates.