General Motors Stock: Tariffs Trigger 7% Plunge

General Motors shares tumbled over 7% to $47.20 on the New York Stock Exchange following the announcement of new U.S. import tariffs. The 25% tariffs, set to take effect on April 3 for vehicles and May 3 for auto parts, pose significant challenges for GM as approximately half of its U.S.-sold vehicles come from foreign production-primarily Mexico, Canada, Brazil, China, and South Korea. Industry experts calculate these measures could increase costs by roughly $6,700 per vehicle, substantially squeezing profit margins. GM faces a difficult choice: absorb the tariff costs and sacrifice margins or raise prices and risk losing sales. Analysts note that relocating production to the U.S. would require considerable investment and time, typically taking 12-36 months to restructure supply chains.

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The news triggered broader automotive sector losses, with Ford dropping nearly 4% while suppliers Aptiv and BorgWarner each fell about 5%. In contrast, Tesla saw a modest 0.4% gain as investors favored companies with predominantly domestic production. Market experts project that vehicle prices could rise between $5,000 and $15,000 if the tariffs remain, further weakening GM's competitive position. The situation appears particularly challenging for traditional Detroit automakers, with analysts forecasting EBIT reductions of up to 30% for both GM and Ford by 2025, even with price increases and supply chain adjustments. International tensions have also escalated, with Canada already announcing potential retaliatory measures.