Auto Stocks Tumble as Trump’s Tariffs Rattle Global Markets

Auto stocks took a beating on Monday after U.S. President Donald Trump pushed ahead with sweeping tariffs on imports from Canada, Mexico, and China, reigniting fears of a trade war. General Motors plunged 8% in U.S. pre-market trading, while Ford slid more than 5%. 

European automakers also suffered, with France’s Valeo dropping 9%, Stellantis shedding 6.6%, and Volkswagen sliding nearly 7%. In Asia, Toyota and Nissan both sank over 5%, while Honda tumbled 7.2%. Mazda lost 7.5%, and Kia fell nearly 6%.

The tariffs, which include a 25% levy on Mexican and most Canadian goods, alongside a 10% duty on Canadian energy products and Chinese imports, take effect Tuesday. Trump warned Americans should brace for short-term economic pain but justified the move as a necessary step to curb illegal immigration and drug trafficking. Canada and Mexico responded swiftly, vowing retaliatory tariffs of their own 

What Does This Mean for Me?

Analysts say the new duties will hammer the global auto industry, which relies heavily on cross-border supply chains, particularly in North America. With Mexico serving as a key manufacturing hub for U.S. automakers, production costs will shoot up, putting further pressure on margins. 

The trade tensions come at a precarious moment for Germany’s auto giants, with Volkswagen, BMW, and Mercedes-Benz already struggling with weak demand in China. All three have issued profit warnings in recent months.