We See Potential New Trump Tariffs as Only Bad News for GM and Ford, Especially for GM

In a Nov. 25 social-media post, President-elect Donald Trump said that on the first day of his term he will impose 25% tariffs on all goods imported into the US from Mexico and Canada. He said the tariffs will remain in effect as part of a crackdown on drugs, specifically fentanyl, and illegal immigration from these countries. Trump also said China will see a 10% punitive tariff for not stopping drugs, but other than GM’s Buick Envision and Ford’s Lincoln Nautilus, the China tariff is not significant for our US autos coverage. GM’s stock declined by over 8% during Nov. 26 trading while Ford’s stock fell over 2%. We are not changing our fair value estimates for any US auto coverage at this time because it is unclear how long these tariffs, if enacted, will last.