After being elected President of the USA, Trump increased tariffs on Mexico, Canada, and China, causing a decline in the stock prices of American auto manufacturers. The market is concerned that the additional tariffs will raise the costs and pricing of the entire industry.

General Motors (GM.US) fell by over 8% on Tuesday, marking the largest intraday drop since mid-2022. European car manufacturer Stellantis (STLA.US) dropped by 5%. Ford (F.US) fell by 2%.

Analysts at Bernstein stated that Stellantis, Volkswagen, Ford, and General Motors will face risks from increased tariffs in Canada and Mexico. According to a research report from November 26th, approximately 40% of Stellantis and Volkswagen's automobile sales in the USA are imports, while General Motors imports around 30%, and Ford imports 25%.

Although the USA has existing trade agreements with Canada and Mexico, additional tariffs may increase production costs and raise automobile prices.

General Motors has one of its four large light-duty truck manufacturing plants in Mexico, most of which are sold in the USA. They also produce electric vehicles at the Mexican plant.