GM, Ford shares fall amid Trump's tariff threat

Additional levies would see car prices soar; analysts say move would be 'devastating'

DETROIT - Shares of US automakers tumbled on worries that a new round of tariffs imposed by US President-elect Donald Trump will cause sticker prices to soar even further.

Trump said that he would impose additional 10 per cent levies on goods from China and 25 per cent on all products from Mexico and Canada - critical trade routes for the auto industry's global supply chain. It is unclear how new tariffs would be implemented under an existing trade agreement between the US, Canada and Mexico, but the threat underscores the incoming president's intention to shake up global trade ties.

Tariffs of that magnitude on the roughly US$97 billion (S$130 billion) worth of auto parts and four million finished vehicles that come to the US from Canada and Mexico would be "devastating", Wolfe Research analysts said in a note on Nov 26. Average new-car prices would rise about US$3,000, they said, adding to an almost US$50,000 cost that many consumers are struggling to afford.

"The entire year, we've been talking about affordability," said Ms Stephanie Valdez Streaty, director of industry insights at market researcher Cox Automotive. "Anything that's going to increase prices is going to be difficult for consumers who are already facing difficulties in affording vehicles."

Shares of General Motors fell 9 per cent on Nov 26, the biggest drop since 2020. Shares of Ford Motor and Stellantis also declined.