Automaker stocks plunged on Tuesday after President-elect Donald Trump announced plans to implement 25% tariffs on imports from Mexico and Canada when he takes office on January 20. Companies such as General Motors and Stellantis, which rely heavily on manufacturing in these countries, saw sharp declines in their stock prices, with GM dropping more than 8% and Stellantis over 5%.

The tariffs could disrupt supply chains and significantly increase costs for automakers, as 26% of U.S. imports from Mexico and 12% from Canada are automotive-related. Analysts believe Trump’s aggressive tariff strategy may be intended as a negotiation tool to secure more favorable trade agreements.