Shares of automakers fell in early trade on Monday after the United States imposed a 25% tariff on most goods from Canada and Mexico and 10% on various Chinese goods, raising concerns about a potential global trade war.
The tariffs will hit the automotive sector hard because it relies heavily on cross-border manufacturing and complicated supply chains.
Vehicles produced in the US using parts sourced from Canada, such as the Ford F-Series and GM trucks, will incur additional costs.
Analysts estimate the tariffs could cost automakers an additional $33 billion per year, resulting in higher vehicle prices for consumers.
On Monday, shares of Honda Motor (NYSE:HMC) fell 6.3% while General Motors Company (NYSE:GM) fell 6.1%. Tesla Inc (NASDAQ:TSLA) shed 6.5%.
Ford Motor Company (NYSE:F) was down 3.8%, Toyota Motor (NYSE:TM) fell 3.6% and Nissan (OTC:NSANY) was also down 3.6%.