EXCLUSIVE: Ford, GM Just Hit A Tariff Wall - Will Margins Crumple On Cost Pressures?

Detroit’s automakers are hitting speed bumps – and they're made of steel. Ford Motor Co F and General Motors Co GM tumbled 3.7% and 4.1% respectively on the day the U.S. announced 50% tariffs on imported steel and aluminum.

The market didn't wait for earnings calls – investors immediately priced in the hit to margins.

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Steel Tariffs Could Add $200-$400 To Per Vehicle Cost

Tracy Shuchart of NinjaTrader says these fears are justified. “Steel and aluminum represent 15–20% of total vehicle production costs,” she said in exclusive insights shared with Benzinga over an email interview. “For a typical mid-size sedan, we’re looking at roughly $800–$1,200 in steel content per vehicle. A 50% tariff could easily add $200–400 to vehicle production costs.”

Read Also: Trump’s 50% Steel Tariff Could Drive Up The Costs For Automakers: ‘Almost $2,000 Of Cost For Each Car’

Why Ford, GM Investors Should Brace For Impact?

Ford and GM are particularly vulnerable because of their long-term supply agreements with Canadian steelmakers, who now face full tariffs. While domestic producers celebrate, automakers will need to renegotiate contracts, seek alternative supply chains, or pass costs onto consumers – a tough sell in an already competitive EV market.

“Ford and GM are particularly vulnerable because they source significant steel volumes from Canada under existing supply agreements that will now face the full tariff impact,” Shuchart said.

Investors who believe these pressures may persist might consider short-term hedges or adding exposure to raw material producers like Cleveland-Cliffs Inc. CLF and Steel Dynamics Inc. STLD instead.

For ETF-watchers, the Global X U.S. Infrastructure Development ETF PAVE offers a blend of industrials and materials exposure that may benefit from rising domestic steel prices.

With tariff-driven cost inflation now a reality, automakers will need to prove they can protect margins without stalling innovation. Until then, the road ahead looks steep.

Read Next:

• US Aluminum Tariffs Risk Supply Chain And Food Security, Industry Insiders Warn

Image created using artificial intelligence via Midjourney.