Tariffs on Mexico, Canada ‘negative’ for Stellantis, Volkswagen, says UBS

A 25% import tariff on goods from Mexico and Canada is now in effect, including autos and auto parts, with UBS telling investors in a research note that the scenario of a 25% tariff on Mexico- and Canada-made vehicles and parts wasn’t fully priced by the market in expectation of a potential last-minute deal between the countries, which hasn’t happened. The tariffs are negative for Stellantis (STLA) and Volkswagen (VWAGY), which have the largest Mexican footprint for exports to the U.S. in the firm’s coverage, while Stellantis also produces in Canada and the U.S. Both Stellantis and VW have a low capacity utilization in their U.S. factories currently so that relocating production to the U.S. is an option, even though this would likely take at least several months to arrange, the firm says. Other publicly traded companies in the space include Ford (F), General Motors (GM), Honda (HMC), Mercedes-Benz (MBGYY), Nissan (NSANY), Tesla (TSLA), and Toyota (TM).