Automakers thought Canada was getting a trade deal. Then tariffs doubled

Canada's retaliation tariffs on U.S. imports, effective September 8, will impact General Motors (GM), Ford (F), and Stellantis (STLA). GM faces $2.5B–$3.5B in gross tariff expenses, while Ford, with a -4.4% net margin and 461% debt-to-equity ratio, is most exposed. Stellantis has lost 53.8% year-to-date. The S&P 500 Automobiles index has fallen ~19% year-to-date.

President Trump announced a 50% tariff on Canadian auto imports starting in 2027, doubling the 25% rate GM has faced since 2025. GM's stock fell 1% on the news, as investors noted the company absorbed $3.1B in tariff costs in 2025, less than its $5B forecast. GM expects $2.5B-$3.5B in tariff costs for 2026 but has raised profit guidance twice this year.

Stellantis shares fell 3% after Trump threatened 50% tariffs on Canadian autos, parts, and steel from 2027. The company faces a €1.0-1.2B tariff headwind, risking its North American recovery. Stellantis' Canadian plants are underutilized, with Brampton's future uncertain. Ford and GM also dropped, while U.S. steelmakers rallied. Canada plans countermeasures from September 8.

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.