GM, Ford Petrified By Trump's Mexico Tariffs

(RTTNews) - US President Donald Trump has shaken the US auto industry after he announced a 5% tariff on all goods imported from Mexico in response to what he called a "mass incursion" of migrants entering the country "illegally".

Shares of the largest U.S. automakers dropped on Friday. Fiat Chrysler dropped about 5%, while General Motors was down 4.4% and Ford slipped 3.1%.

Automakers will be heavily impacted by the tariffs as almost all the major manufacturers import significant number of parts and vehicles it sells in US from Mexico. According to CNBC, GM, Ford and Fiat Chrysler import 29%, 17% and 24%, respectively, of the total parts for its cars and trucks from Mexico.

The tariff would start at 5% on June 10 and then rise in stages every month to 25% on October 1. The tariff will remain at that level unless Mexico stops migrants from crossing the US's southern border, Trump said.

"As everyone knows, the United States of America has been invaded by hundreds of thousands of people coming through Mexico and entering our country illegally. This sustained influx of illegal aliens has profound consequences on every aspect of our national life," Trump said in a statement. "Mexico's passive cooperation in allowing this mass incursion constitutes an emergency."

"If the illegal migration crisis is alleviated through effective actions taken by Mexico, to be determined in our sole discretion and judgment, the tariffs will be removed," he added.