US autos, homebuilders, materials take hits as Trump trade war kicks off

By Medha Singh and Kanchana Chakravarty

(Reuters) -Shares of U.S. companies person travel nether unit from the latest escalation successful Washington's commercialized war, with the newest tariffs connected Canada and Mexico expected to deed net successful respective sectors, including automakers, retailers and earthy materials.

President Donald Trump imposed 25% tariffs connected imports from Mexico and Canada, effectual Tuesday. The enactment covers much than $900 cardinal worthy of yearly U.S. imports from the 2 countries.

Trump besides doubled duties connected Chinese imports to 20% to punish Beijing implicit the U.S. fentanyl overdose crisis. The cumulative work comes connected apical of up to 25% tariffs imposed during his archetypal term.

China responded with further tariffs of 10%-15% connected definite U.S. imports from March 10, portion Canada and Mexico were poised to swiftly retaliate against their long-standing ally.

Economically delicate stocks specified arsenic airlines and banks led the declines connected Wall Street's main indexes connected Tuesday. The benchmark S&P 500 suffered its worst time of this twelvemonth connected Monday aft the U.S. tariffs were confirmed. [.N]

AUTOMOBILES

S&P Global estimates the caller duties connected imports from Mexico and Canada could outgo affected U.S. carmakers connected mean 10%-25% of their yearly EBITDA.

Trump's 25% tariffs connected imported alloy and aluminum would besides summation costs for the industry, which accounted for 15% of nett shipments of robust and alloy successful 2024, S&P Global said successful a note.

J.P.Morgan analysts besides expect automakers to carnivore the brunt of nonstop outgo from tariffs connected Canada and Mexico, with immoderate symptom to beryllium shared with suppliers, dealers and consumers.

This could outgo General Motors astir $14 cardinal (or substantially each of the net earlier involvement and taxes it guides to globally this year) and Ford astir $6 cardinal (or ~75% of the EBIT it guides to globally this year), they said.

Ford has 3 plants successful Mexico. It exported conscionable nether 196,000 cars to North America successful the archetypal fractional of 2024, with 90% going to the U.S., according to Mexico's AMIA.

Stellantis makes 39% of its North American vehicles successful Mexico oregon Canada, portion General Motors and Ford Motor marque 36% and 18% there, respectively, according to a November study from Barclays.

GM's 3 plants successful Canada nutrient electrical vans, the Chevrolet Silverado Heavy Duty truck, and the V8 motor and dual clutch transmission.

Shares of Ford and General Motors person dropped 2.8 and 5.8%, respectively, connected Tuesday.

HOME BUILDERS

U.S. homebuilders, which import earthy materials from the neighboring countries, are besides apt to spot an summation successful costs from the caller tariffs.