Domestic Auto Stocks Sink as Trump Tariffs Take Effect

Key Takeaways

Domestic carmakers’ shares fell Thursday morning after
auto-specific tariffs took effect at midnight.

General Motors (

GM

) shares were recently down more than 3% from Wednesday’s close, while Ford (

F

) shares retreated nearly 3%. Electric vehicle manufacturers were also hit, with Lucid Group (

LCID

) shares falling about 2% and Rivian (

RIVN

) off 4%. Tesla (

TSLA

) shares dropped more than 5% a day after its stock seesawed following disappointing deliveries numbers and
reports that CEO Elon Musk may take a step back
from his work with the Trump administration.

Economists have warned that a 25% tariff on cars and auto parts would
increase prices by thousands of dollars
. Some analysts said manufacturers’ would struggle to
pass along higher production prices without depressing demand.

Stellantis (

STLA

), the company behind Fiat and Chrysler, will pause production at plants in Mexico and Canada and assess the tariffs, according to CNBC, which reported that 900 “US-represented employees” would be temporarily laid off. Its shares were recently down more than 5%. (Read

Investopedia’s

coverage of
today’s markets here
.)

The auto tariffs took effect hours after President Donald Trump
unveiled a package of “reciprocal” tariffs
aimed at what he described as other nations’ unfair trade practices.

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