General Motors (GM) stock plummeted 5.02% in intraday trading on Monday, as investors reacted to President Donald Trump's announcement of plans to double tariffs on imported steel and aluminum. The move is expected to significantly impact automakers' manufacturing costs and profitability.
President Trump stated late Friday that he intends to increase tariffs on imported steel and aluminum to 50% from 25% starting Wednesday. This decision has sent shockwaves through the automotive industry, with GM and other major U.S. automakers feeling the brunt of the impact. Ford Motor Co. also saw its shares decline by more than 4% in response to the news.
The increased levies are likely to drive up production costs for automakers, as steel and aluminum account for a substantial portion of a vehicle's weight and cost. According to brokerage Bernstein, doubling the existing 25% metals levy would increase the cumulative cost of Trump's tariffs by roughly 5% to just above $7,000 per car. This cost increase could potentially squeeze profit margins or force automakers to raise vehicle prices, potentially dampening consumer demand.
