Shares of major U.S. automakers declined on Monday after President Donald Trump announced plans to impose a 50% tariff on Canadian automotive imports, including cars, trucks and parts, effective January 1, 2027.
Ford Motor (F) fell 2.2%, General Motors (GM) dropped about 1%, and Stellantis (STLA) declined 3.2%, reflecting investor concerns over the potential impact on supply chains and production costs. The new tariffs apply to all vehicles and automotive components originating from Canada, though vehicles manufactured within the United States will be exempt.
The announcement follows Trump’s statement on social media that Canada would be treated as a "state" rather than as a trade partner under previous arrangements. The move escalates trade tensions between the two countries and adds to uncertainty in the automotive sector, which has increasingly relied on cross-border supply chains. The S&P 500 Automobiles Index has declined approximately 19% year-to-date, including Monday’s losses.
