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Last week, President Donald Trump announced a 25% tariff on vehicle imports. These tariffs will take effect on April 3, a day after what the president has described as “liberation day,” when he is scheduled to announce his reciprocal tariffs.
Auto stocks unsurprisingly crashed last week. The U.S. automotive industry – which happens to be very lucrative for auto majors – relies heavily on imports, and just over half of the cars sold last year were produced stateside. Foreign players like Toyota (TM), Hyundai (HYMTF), and Volkswagen (VWAGY) import many cars into the U.S. from their home markets. Even U.S.-based automakers like Ford (F) and General Motors (GM) have gradually moved production overseas to Canada and Mexico, with the latter accounting for almost a third of auto imports last year.
