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,

The auto industry is staring down a crisis. Donald Trump’s sweeping new tariffs on imports from Canada, Mexico, and China threaten to upend supply chains, raise car prices, and force automakers to make difficult decisions about production.

President Donald Trump over the weekend announced planned tariffs on imports from Canada, Mexico and China. Some auto groups have reacted to the tariffs.

As things stand on Monday, Canada stands to be the first major victim of President Donald Trump's long-promised tariffs — and the automotive industry is preparing for a major change in the ways it operates as a result.

New import tariffs imposed by the US Trump administration are being planned for implementation on 4 February. They include 25% tariffs on goods from Mexico and Canada that would include automotive components and vehicles (Canadian energy faces a lower 10% tariff). Goods imported from China would attract a 10% tariff.

For months, automakers have been taking a “wait-and-see” approach to the Trump administration’s potential tariffs.

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The automaker most exposed to tariffs might be Volkswagen, however, given that over 40% of its U.S. sales are produced in Mexico. Even after Trump’s agreement with Sheinbaum, the German manufacturer’s stock was down nearly 4%. On Monday morning, the company said it is currently assessing the potential impact of the tax increase.

On Saturday, President Donald Trump announced major tariffs on countries like Mexico and Canada, two of the biggest suppliers to the U.S.’s auto industry — with one in five cars sold in the states being built in the two nations, according to S&P.