GM, Ford take a hit after Trump says 25% tariffs on Canada, Mexico are imminent

General Motors and Ford erased gains to finish lower after President Trump reiterated his intention to impose 25% tariffs on Canada and Mexico.

“Mexico and Canada have never been good to us on trade. They’ve treated us very unfairly on trade,” he said. “We don’t need what they have.”

The two American car giants have been some of the largest beneficiaries of the US-Mexico-Trade Agreement, or USMCA, as well as the free trade deal that preceded, NAFTA. The auto sector in particular has integrated its supply chain across Mexico, the US, and Canada.

General Motors and Ford made over 900,000 and 336,00 cars in Mexico in 2024, respectively.

Mexico and Canada are America’s largest trading partners, beating out China in recent years thanks to the USMCA. Trump has long teased the tariffs, which he said are necessary to prevent the flow of migrants and drugs.

“Mexico and Canada are a surprising choice for Trump’s ire since they both run trade deficits,” Neil Dutta, head of US economics at Renaissance Macro, wrote in a Thursday afternoon note. “It is in the interest of all of North America to get the Chinese to increase their household consumption.”

The tariff threats were felt throughout financial markets. The dollar rose, and the Canadian loonie and the Mexican peso fell. Crude oil futures rose as well.