History Says What the 2025 Auto Tariffs Cost General Motors, and Canada's Rate Is About to Double

The U.S. National Highway Traffic Safety Administration (NHTSA) has escalated its investigation into General Motors' eBoost brake-by-wire system, which may affect over 1.1 million vehicles. The probe, now at its highest level, follows reports of brake failures, including 22 crashes and 6 injuries. GM maintains the issue does not pose an unreasonable safety risk, but a recall may be imminent.

GM faces a federal safety investigation over 745 reports of brake assist failures in its eBoost system, affecting 1.16 million vehicles. The NHTSA elevated the probe to an Engineering Analysis, a step before a recall. GM attributes the issue to fractures in the eBoost spindle, but NHTSA reports discrepancies in driver accounts. Affected models include various GM, Acura, and Honda vehicles from 2023 to 2026.

NHTSA is investigating brake issues in 1.16 million GM vehicles, including SUVs, trucks, and EVs, due to reported failures in the eBoost brake system. GM attributes issues to broken spindles, but NHTSA has received conflicting reports. Affected models span 2023-2026 across multiple brands.

President Trump proposed 50% tariffs on Canadian auto exports, potentially impacting C$40.8B in trade. Canada plans counter-tariffs and support measures. U.S. automakers' stocks fell, with Ford (F) down 3.6% and Stellantis (STLA) down 4.2%. The actual impact may vary based on final tariff rules.

Magna International (MGA) fell 7.19% after Trump threatened 50% tariffs on Canadian vehicles and parts. Ford (F), Stellantis (STLA), and GM also declined. Magna, with high Canadian exposure, thin margins, and a beta of 1.86, is most vulnerable. Ford has negative earnings, high debt, and significant Canadian operations. GM has high leverage but less direct exposure. Stellantis, already down 54% YTD, has lower direct exposure but faces broader macro risks.

NHTSA expanded its investigation into brake-assist loss in GM vehicles with the eBoost system, now covering 12 GM models (2023-26) and two Honda vehicles (Prologue, Acura ZDX), totaling 1.16 million vehicles. GM identified potential spindle fractures but denies an unreasonable safety risk. NHTSA aims to determine if a recall is needed, with 745 failure reports logged, including 22 crashes. Dealers may face increased service demands if a recall occurs.