When the announcement was made on Wednesday, Fiat Chrysler stocks fell 12 percent and GM stocks dropped 4.6 percent.
CNN Money reports that GM cited rising commodity prices.
Ford Motor Company shares fell nearly 5 percent in after-hours trading to a new 52-week low of just above $10 a share. Ford's commodity costs soared by about $300 million this quarter, with at least half being blamed on tariffs on steel and aluminum. Ford’s Chief Financial Officer Bob Shanks
told CNBC the tariffs are expected to eat up about $600 million in profit this year
Steel and aluminum prices have gone up since the Trump administration's tariffs on the metals went into effect. This includes domestic steel and aluminum, which are more expensive without the threat of lower-priced imports.
Automakers usually have prices for commodities locked in by contracts, and as Richard Palmer, the chief financial officer of Fiat Chrysler said, the company is already seeing some higher prices and is wary about prices later after existing contracts expire.
"I'm not overly concerned today," he told investors on a conference call, "but we do need to keep an eye on commodity prices as we move into the first part of 2019."
Fiat also cited changes to Chinese import tariffs as stifling demand. In May, China cut its import duties from 25 percent to 15 percent in an effort to fend off further action by Trump, leading to a slowdown among Chinese car buyers in anticipation of price cuts, according to the
Financial Times.
Ford cited lower sales in Europe and Asia and a fire at a North American supplier as having a detrimental impact on both
earnings and profits this quarter.
What does this all mean? Analysts say the threat of further tariffs will more than likely effect full-year forecasts for automakers, even though most of the companies are looking forward to strong U.S. sales which have generally been good. But all the major automakers are paring their profit outlook for the year - all because of those tariffs.
