Detroit -Bil manufacturers see stock fall as customs fear shakes the market

On February 4, 2025By Littum

Auto shares took a brutal hit on Monday when Trump’s shocking trade war broke Wall Street.

The General Motors share was down a little more than 6% and traded at $ 46.46 per year. Share at. 9:45, down $ 3 per Stock. Ford Motor Co. -The share was down almost 4% and traded at $ 9.69 per year. Share Monday morning, down 39 cents per Stock.

Stellantis traded at $ 12.43 per Share, down 70 cents per Share or 5.33% within the first 20 minutes of trading day Monday.

The American automotive industry is a carefully oiled machine when it comes to the huge amount of car parts traded with Canada and Mexico. In addition, the proposed tariffs could be devastating when it comes to affordable prices for cars and trucks, which are still more affordable for average consumers as it is.

Not surprisingly, sales in auto shares were worse than the overall stock market, which was bad enough. Dow Jones Industrial Average fell 1.47% shortly after 7 p.m. 10 and lost 656.89 points to trade with 43,887.77 points.

However, how bad things are can be discussed, although much of the atmosphere on Wall Street originally seemed like a level of panic that we have not seen in some time. Things seemed to settle down somewhat later in the morning.

Shortly before 7 p.m. At 10.30 the Auto Shares got land and GM was down by about 3%, Ford was down about 1.4%, and Stellantis was down to about 3%.

Dow was down about 0.65% shortly before 7 p.m. 10.30pm

CNBC quickly reported that pending conversations were ahead with Canada on Monday afternoon.

CBC News in Canada reported that Prime Minister Justin Trudeau spoke with President Donald Trump early Monday morning about the pending trade war. No decisions were made, but Trump reportedly said he would talk to Trudeau at. 15 Monday.

The 25% duty on Canadian goods is set to go into place on Tuesday. Energy resources from Canada will have a lower duty of 10%.

Shortly after 7 p.m. 10.30 am, CNBC also reported that Trump paused the new tariffs at Mexico for a month. Mexico President Claudia Sheinbaum announced on social media that Mexico will immediately reinforce the northern border with 10,000 members of the National Guard to prevent drug trafficking from Mexico to the United States, especially Fentanyl.

Trump confirmed one-month agreement via social media on Monday morning.

However, investors have to realize that uncertainty is the name of the game these days in Washington, and now on Wall Street when Trump is quickly moving to shake the status quo and trigger chaotic development.

On Monday morning, the original improvement on Wall Street showed that the markets stayed better than expected, according to David Sowerby, CEO and portfolio manager of Ancora Advisors in Bloomfield Hills.

Still, he said, “Tariffs could well be the catalyst for a correction.”

Sowerby said there is a potential for a 5% correction to 7% on Wall Street, with the stock market on average one “5% HIK twice a year.” The market can see a correction of 10% once a year.

For investors, Sowerby said, it may be even more important to understand what they own and how these companies are exposed to the three major trading partners with the United States – Canada, Mexico and China.

Basic economics classes teach you that customs rates are a tax on consumers, noted Sowerby, and Trump’s duty would be no different.

On February 1, the White House announced that it “addressed an emergency.”

“The extraordinary threat made up of illegal aliens and drugs, Including deadly fentanyl constitutes a national emergency under the International Emergency Economic Powers Act, “according to a White House statement.

Trump was to complete a 25% additional duty on the imports of Canada and Mexico and a 10% additional duty on imports from China. Energy resources from Canada would have a lower duty of 10%, according to the fact sheet of the White House.

The Wall Street Journal had a dazzling editor that attacked Trump’s new 25% duty in Canada and Mexico, dubbing it the “stupidest trade war in history.”

That editorial threw a hard new word into our vocabulary, Autarky.

“Mr. Trump sometimes sounds like the United States should not import anything at all that America can be a perfectly closed economy that does everything at home,” according to the Wall Street Journal Editorial.

“This is called Autarky, and it’s not the world we live in, or someone we want to live in, which Mr. Trump can soon find out.”

It is a level of protectionism and dissatisfaction with trade that leaders in most countries recognize evil economic growth. And Wall Street can’t help but keep a careful clock about the situation.

What is disturbing is how fast Trump acted on his much -talked about tariffs so shortly after the inauguration day 20 January.

“The announced increase in tariffs was even bigger and came faster than we had a pencil in,” according to a report that was released on Monday by GDP Paribas.

As a result, the prices that consumers pay for many goods are expected to “rise sharply in the coming months, while the tariffs will put the brakes on economic growth”, according to the report from the French multinational banking and financial service business.

Even if the tariffs appear temporary, the report noted that Trump introduced the customs before they negotiate, the potential financial costs.

The assumption, noticing the report, had been that the negotiations would prevent customs duty rates for Canada and Mexico from going into place.

According to some analysts, the risk of continuous escalating trade war increases, according to some analysts.

Contact Personal Finance -Paltist Susan Toppor: [email protected]. Follow himR. at x @tompor.