Stock in American car companies falls after Trump announces new tariffs: reports
President Donald Trump announced on Wednesday that he would place a 25% tariff (or tax) on “all cars that are not made in the United States,” as well as certain automobile parts. The markets began responding with mere mention of a press conference about auto tariffs late Wednesday.
By Thursday morning, stocks fell at the market's opening.
CNBC reported, "General Motors stock was down about 8% in morning trading Thursday, while Stellantis lost nearly 4% and Ford Motor shares were down 2%. Shares of Tesla, however, were nearly 2% higher."
ALSO READ: 'Not much I can do': GOP senator gives up fight against Trump's tariffs
The general Dow Jones Industrial Average rallied by late morning.
On Thursday, Deutsche Bank analysts assessed that “GM has the most exposure to Mexico.”
“In our coverage, for [original equipment manufacturers], Tesla and Ford appear to be the most shielded given location of vehicle assembly facilities, although Ford does face incremental exposure on imported engines,” they also said, according to CNBC.
The site explained that most vehicles are made of "tens of thousands of parts, many of which cross back and forth over the U.S. border before a final product is completed."
A Goldman Sachs analyst warned that Trump’s 25% tariff could mean higher prices for imported cars.
"If roughly 50% of parts in a U.S.-made car came from foreign sources, the tariff could raise the price of those cars by $3,000 to $8,000," they added according to CNBC.
The United Auto Workers Union is excited about it, however.
“These tariffs are a major step in the right direction for autoworkers and blue-collar communities across the country, and it is now on the automakers, from the Big Three to Volkswagen and beyond, to bring back good union jobs to the U.S.,” said UAW president Shawn Fain in a statement Wednesday.