Automaker stocks slipped on Monday following President Trump’s move to impose tariffs on goods coming from Canada and Mexico.

The tariffs, set to take effect on Tuesday, will include 25% duties on Canada, while Mexican President Claudia Sheinbaum and Trump said 25% tariffs on Mexico would be delayed until March. Trump’s tariff plan also includes 10% duties on China, with the president claiming tariffs on Europe will "definitely happen" but giving no further detail.

Read more: The latest news and updates as Trump's tariff deadline approaches

Shares of the Big Three automakers GM (GM), Ford (F), and Stellantis (STLA), as well as rivals Toyota (TM) and Honda (HMC), all closed down at least 2% on Monday, but pared losses midday following the Mexico tariff delay. Even Tesla (TSLA), despite not making any cars in Canada or Mexico, saw its stock fall 5.2%, likely due to the fact it uses parts from those regions for its cars.

Currently, Canada produces around 10% of cars sold in the US (approximately 1.5 million units), with Mexico supplying close to 20%, according to a report from TD Economics.

GM produces the Silverado and Sierra pickups in the US, Mexico, and Canada, and Ford sells Mexican-made Maverick pickups, Bronco Sport SUVs, and Mustang Mach-E EVs in the US. Stellantis builds the Chrysler Pacifica minivan in Canada, as well as the Dodge Charger Daytona EV.

Read more: What are tariffs, and how do they affect you?

GM, which reported earnings last week, said it was working to minimize the impact.

“From a Mexico perspective, we do build trucks in Mexico and in Canada and in the United States. And so we have the capacity in the United States to shift some of that,” GM CEO Mary Barra said on the company's earnings call. “We also sell trucks globally, and so we can look at where the international markets are being sourced from. So there's plays that we can do on that perspective to minimize the impact.”

Auto parts could be an even bigger issue for the automakers.

Mexico’s INA auto parts trade group estimates that the country’s auto parts industry hit $124.5 billion in sales last year, with 52.3% of total auto parts destined for the US. INA said a whopping 87% of Mexican-produced auto parts are exported, with the US being the “primary partner.”

A new report by Alix Partners found that the total parts and components business from both the US and Canada totaled $224 billion in 2024.

Higher costs for parts will raise prices for US-built automobiles, which will likely be passed on to consumers.

“By some estimates, average US retail car prices could rise by roughly $3,000, though that would depend on retaliation by both trading partners [Canada and Mexico],” TD Economics said. A new report from Wolfe Research found the same price hike for new cars in the US if tariffs come to pass.