Why GM stock is getting hit the hardest by Trump auto tariffs

As auto shares reacted to the newest tariff announcement out of Washington, D.C., on Thursday, Common Motors took the brunt of the hit.

Shares of GM had been down greater than 6% in early afternoon buying and selling, far underperforming the likes of Ford and Stellantis, which shed greater than 3% and 1%, respectively. Tesla stock was up greater than 1%.

The divergence stems from the quantity of automobiles that GM imports, and its publicity to Mexico specifically.

“Tesla and Ford seem like the most shielded given location of auto meeting amenities though Ford does face incremental publicity on imported engines,” Deutsche Financial institution analysts wrote in a word Thursday. “GM has the most publicity to Mexico.”

President Donald Trump on Wednesday introduced his administration would impose 25% tariffs on “all automobiles that aren’t made in the United States” and a few car components. The manager order signed Wednesday permits for some leniency for parts which might be compliant with the United States-Mexico-Canada Settlement, but it surely was not instantly clear what reduction that may supply the North American automotive trade.

Mexico accounted for 16.2% of auto imports into the U.S. as a proportion of gross sales in 2024, in line with GlobalData. That was the largest share of any nation, about double the shares of South Korea and Japan, which ranked second and third by way of import quantity, respectively.

Roughly 52% of GM automobiles bought in the U.S. throughout the first three quarters of 2024 had been assembled in the U.S., in line with analysis by Barclays analyst Dan Levy. That leaves 30% assembled in Canada and Mexico, and one other 18% introduced in from different nations.

Levy additionally identified that GM depends closely on Mexico and South Korea for manufacturing of a few of its small crossovers, together with its Equinox and Blazer automobiles.

“Roughly half of GM’s US gross sales are produced in the US, however imported components are a priority,” he stated.

Throughout the similar interval, 57% of Stellantis automobiles and 78% of Ford automobiles bought in the U.S. had been assembled stateside. Levy reported Stellantis assembled 39% of its U.S.-sold models in Canada and Mexico, and Ford, simply 21%.

Wolfe Analysis’s Emmanuel Rosner stated the tariffs primarily have an effect on foreign-brand automakers, however famous that 15% of GM’s U.S. automobiles come from South Korea.

John Murphy from Financial institution of America stated compared to the broader automotive market, GM is “comparatively uncovered to the tariffs” and should have to rebalance.

GM stock is down 13% yr to this point. Shares fell sharply in late January after buyers fearful that the automaker didn’t handle considerations about tariffs in its most up-to-date earnings report.