Auto stocks took a battering on Monday as the market reckoned with the reality of President Donald Trump’s 25% blanket tariff on all goods from Mexico and Canada. The selloff subsided, however, when Trump announced the tax hike on Mexican imports would be postponed for one month after Mexican President Claudia Sheinbaum said she would deploy soldiers to her country’s northern border to combat drug trafficking. Virtually no car manufacturer would be immune from the proposed tariff owing to these companies’ deeply interwoven North American supply chains, which have largely been built around free trade for decades.
Shares of General Motors, America’s largest carmaker, plunged 7% in premarket trading Monday but recovered to trade roughly 1% to 2% lower than Friday’s close. The stock had already dipped nearly 9% last week on tariff fears despite the company beating Wall Street estimates for both quarterly earnings and forward guidance on Tuesday.
