Tesla, Inc. ( TSLA ) shares are trading lower on Monday following President Donald Trump’s announcement that tariffs on all products from Canada, Mexico and China will take effect on Tuesday.

The Details: According to CNN, Trump imposed a 25% tariff on all imported goods from Canada and Mexico, along with an additional 10% tariff on goods from China. Energy exports from Canada, however, will be subject to a reduced tariff of 10%.

Trump has since paused his tariffs on Mexico for a month after Mexican President Claudia Sheinbaum agreed to send troops to the border, per CNBC.

The tariffs are expected to impact the auto industry significantly. Last year, the U.S. imported roughly $87 billion in motor vehicles and $64 billion in vehicle parts from Mexico, excluding December. From Canada, the U.S. imported around $34 billion in motor vehicles between January and November.

The electric vehicle industry may be particularly affected, as companies could depend on imported components like batteries and semiconductors. These increased costs may ultimately be passed on to consumers.

Trump reportedly stated that while Americans might feel “some short-term pain” from the tariffs, in the long run, the U.S. has been “ripped off by virtually every country.”

In response, Canadian Prime Minister Justin Trudeau has retaliated by imposing tariffs on American products. Specifically, Trudeau announced a 25% tariff on around $105 billion worth of U.S. goods.

What Else: Last week, Tesla announced fiscal results for the 2024 fiscal-year and fourth-quarter. For the fourth-quarter, Tesla reported adjusted earnings per share of 73 cents, missing analysts estimate of 76 cents. In addition, the company announced sales of $25.70 billion, missing analysts estimate of $27.26 billion.

Tesla also reported a 7% year-over-year decline in fourth-quarter production, while deliveries increased by 2% compared to the same period last year.

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TSLA Price Action: At the time of writing, Tesla stock is trading 6.00% lower at $380.19, according to data from Benzinga Pro.

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