Trump’s Tariffs Would Deal a Big Blow to the Auto Industry

Published On Nov 26, 2024, 11:31 AM

President-elect Donald J. Trump's plan to impose a 25% tariff on imports from Canada and Mexico could severely impact the auto industry, which relies heavily on parts and manufacturing from these countries. Many popular vehicles, including some from major manufacturers such as Stellantis, General Motors, and Ford, are assembled in these regions. A surge in prices due to tariffs could lead to decreased vehicle sales and potential layoffs. This comes at a time when the auto industry is already facing challenges, including shifting consumer preferences and increasing competition from Chinese automakers.

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Stock Forecasts

FView F chart on TradingView

Negative

The potential tariffs could lead to significant price increases for vehicles, thereby depressing sales and harming profits for US-based automakers. This environment might reduce investor confidence in these stocks, leading to a negative price impact following any tariff announcements.

GMView GM chart on TradingView

Negative

Given the strong financial ties of the auto industry with the supply chain across North America, and the potential for increased manufacturing costs, it is likely that automakers like GM will see downward pressure on their stock prices if tariffs are enacted.

TENView TEN chart on TradingView

Negative

For investors in auto parts suppliers such as Tenneco Inc., which depend on cross-border commerce, the forecast could be similarly negative as increased tariffs could cut into profit margins and sales.

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