Stocks shift into reverse as Trump rolls out new auto tariffs
Stocks took a hit in afternoon trading as the White House hinted at President Trump’s upcoming announcement of more tariffs, with U.S. auto imports being the latest target. The S&P 500 closed down 1.1% at 5,712, the Dow Jones Industrial Average fell 0.3%, and the Nasdaq Composite dropped 2% as investors shied away from major technology companies.
After a delayed announcement, President Trump revealed that a 25% tariff would be imposed on all vehicles imported into the U.S. “This will continue to spur growth like you haven’t seen before,” he stated from the Oval Office on Wednesday afternoon. “We’ll effectively be charging a 25% tariff. But if you build your car in the United States, there is no tariff.”
Automaker stocks declined ahead of the announcement, with General Motors falling 3.2% and Stellantis, the parent company of Chrysler, Dodge, Jeep, and Ram, dropping 3.5%. These companies have manufacturing plants and supply chains spread across North America, so additional tariffs could increase their costs and impact profits.
Tesla shares, already down 33% this year due to disappointing sales and consumer dissatisfaction over CEO Elon Musk’s ties to the Trump administration, fell nearly 6% following the announcement.
Consumers are also expected to feel the impact of increased import duties, with estimates suggesting that new tariffs on U.S. car imports could raise vehicle costs by anywhere from $2,000 to $12,200 for certain models.
Aside from the auto sector, investors are concerned about President Trump’s protectionist trade policies. The upcoming tariffs, set to be announced on April 2, include 25% duties on imports from Mexico and Canada, along with broader levies on various U.S. trading partners.
Adam Crisafulli of Vital Knowledge noted that Trump’s commitment to tariffs could lead to economic disruption, softer growth, and higher inflation in the short term. The Federal Reserve has already revised its economic growth outlook to 1.7% due to the anticipated impact of tariffs.
A recent analysis by Oxford Economics indicated that U.S. tariffs could result in price increases of up to 4% for certain products, such as home appliances, musical instruments, tableware, utensils, and personal care items.
