Shares of auto companies are sliding as U.S. President Donald Trump's previously announced 25% tariffs on auto imports activate.
U.S.-based shares of Stellantis are down 7.5%, Ford has fallen 3.8%, and General Motors is down 2.5%
Tariffs could cost consumers more than $30 billion in higher vehicle prices and reduce car sales in the first full year, consultancy firm Anderson Economic Group said
Tariffs on auto parts, which activate on May 3, will cover more than $460 billion worth of imports of vehicles and auto parts imports annually
Reciprocal tariffs announced by Trump do not stack atop the auto tariffs, said James Picariello, analyst at BNP Paribas Exane.
Picariello added that the current tariffs would affect 50% of all vehicles sold in the U.S. and raise the average price of a new vehicle by about 7% or $3,200.
Tariffs on auto imports is about to cause all car prices in the U.S., even if the vehicle is produced domestically, to rise between $3,500 and $12,000, CNN reported. The increases are likely to come within a few weeks after the 25% tariffs go into effect on April 3.
That’s because the one-in -two cars sold in the U.S. that are manufactured here import a significant amount of components, primarily from Canada and Mexico.
There’s no such thing as an all-American car, as even the Trump administration concedes.
“The average domestic content is conservatively estimated at only 50% and is likely closer to 40%,” according to a Trump administration fact sheet.
By some estimates, a $40,000 American car could be hit with a $5,000 levy. Anderson Economic Group, a Michigan think tank, estimates car costs will rise between $3,500 to $12,000.
“There’s probably not a vehicle on the market today that wouldn’t be affected in some form or fashion by tariffs,” said Peter Nagle, an automotive economist with S&P Global Mobility. “I would think prices would start to change in the one-to-two weeks after the tariffs go into effect.”
© 2025 Thomson/Reuters. All rights reserved.