Here are the market's biggest losers from Trump's fresh auto tariffs
CLAUDIO CRUZ/Getty Images
- Trump announced a 25% tariff on imported vehicles, hitting auto stocks on Thursday.
- About half of the 16 million cars sold in the US annually are made abroad.
- Tesla and Rivian stocks jumped on Thursday as they manufacture their vehicles domestically.
President Donald Trump announced a 25% tariff rate on all imported vehicles on Wednesday, and investors are spooked.
Most auto stocks moved lower on Thursday in reaction to the tariffs, with various automakers expected to be negatively affected by the higher prices.
The tariffs don't take effect until April 3, and there's a chance negotiations result in changes to the final rate or a narrowing of the scope.
But investors are shooting first and asking questions later. That's because the tariffs if fully enacted, could cost automakers tens of billions of dollars.
Of the roughly 16 million cars sold in America each year, about half are manufactured outside in other countries, and nearly all of them rely on foreign-made auto parts, which are also subject to the new tariffs.
JPMorgan analyst Ryan Brinkman called the tariffs "draconian" in a note on Thursday and lowered his price targets for General Motors, Ford, and Ferrari as a result.
"We are lowering our price targets for shares of General Motors, Ford, and Ferrari given the increased potential for material earnings risk from draconian auto tariffs that now seem likelier than ever to be imposed as soon as April 3," Brinkman said.
Brinkman estimates that the new tariffs could cost the auto industry $82 billion, double his prior estimate of $41 billion.
Here are the biggest losers from the Trump auto tariffs, based on Thursday's price action.
General Motors
General Motors stock declined about 7% on Thursday, after dropping 3% on Wednesday. The company relies heavily on manufacturing its vehicles in Canada and Mexico.
Markets Insider
Ford
While Ford is better insulated from the tariffs than General Motors thanks to its domestic manufacturing plants, it still stands to take a sizable earnings hit, ranging from $2 billion to $4.5 billion, according to JPMorgan. The stock dropped 4% on Thursday.
Markets Insider
European automakers
European automakers were slammed on Thursday, including luxury manufacturers like BMW, Mercedes-Benz, and Porsche. Shares of all three companies declined by about 3%.
Markets Insider
Relative winners
While the Trump tariffs are expected to raise the price of autos across the board, some manufacturers are better insulated, including Tesla and Rivian, which manufacture the bulk of their vehicles domestically.
Tesla and Rivian stock both jumped about 2% on Thursday.
Markets Insider