Ricardo Howard
General Motors (GM), Ford (F) and Stellantis (STLA) are staring down a new layer of trade uncertainty after the Trump administration declined to renew the U.S. Mexico Canada Agreement, a decision that starts a 10 year countdown of annual reviews and threatens to reshape the cost structure underpinning North American auto manufacturing.
The refusal doesn't kill the pact outright. USMCA now enters a review cycle that runs until 2036, with the option to extend to 2042 if all three governments agree, and any signatory can walk away with six months' notice. For automakers that have spent years building supply chains around the deal's Rules of Origin thresholds, the ambiguity is itself a cost. Automotive News reports the administration wants to push the regional content requirement from 75 percent to 82 percent, and add a new rule forcing 50 percent of a vehicle's parts to originate specifically in the U.S., not just North America broadly.
General Motors: Valuation, Momentum (RSI) and Yield
GM shares recently traded near $54, essentially flat on the session, giving the automaker a market capitalization in the neighborhood of $47 billion. The stock carries a trailing P/E near 8, reflecting EPS of roughly $6.70, a multiple that remains well below the broader market and even below many industrial peers, largely because investors continue to price in tariff and trade policy risk rather than GM's underlying cash generation. Shares have ranged between roughly $40 and $60 over the past 52 weeks, putting the current price in the upper half of that band. The dividend yield sits around 1 percent, modest by historical standards but consistent with a company still prioritizing buybacks.
RSI readings on GM have hovered in a neutral zone, neither overbought nor oversold, suggesting the market hasn't yet decided how to price the USMCA standoff. The bull case rests on GM's low earnings multiple already discounting significant trade friction, meaning further clarity, even unfavorable clarity, could remove an overhang rather than create a new one. The bear case is more direct: if Rules of Origin thresholds rise to 82 percent with a 50 percent U.S.-specific carve out, compliance costs climb and margins on North American built vehicles compress, particularly for models that lean on Mexican or Canadian sourced components.
Ford and Stellantis face a similar calculus, though their exposure differs by how much of their North American production already clears the higher domestic content bar. Under the current framework, USMCA compliant vehicles avoid the administration's 25 percent tariff, while a 27.5 percent tariff, the legacy 2.5 percent rate stacked with the 25 percent Trump tariff, applies to the value of non compliant, non U.S. content. That structure rewards automakers that can quickly re-source parts domestically and penalizes those with deeper Mexican or Canadian supplier ties.
What the Automakers Are Saying
The American Automotive Policy Council, which represents Ford, GM, and Stellantis, struck a cautious tone in a Wednesday statement, calling North American economic integration a source of
