Trade tensions are roiling the automobile sector after talks between the U.S. and Canada broke down over the weekend. New tariffs likely won't be a win for the U.S. auto industry.

Fresh 50% tariffs on some $30 billion in Canadian goods have gone into effect. A range of goods are affected, from dairy to wood to hockey equipment. More significant tariffs that could hit U.S. car makers could also be coming.

"On January 1, 2027, Tariffs on all cars, trucks, both large and small, automotive parts, and steel will be increased to 50%," President Donald Trump said in a social media post Monday.

Shares of General Motors, Ford Motor, and Chrysler-parent Stellantis were down 0.9%, 2.4%, and 2.7%, respectively, on Monday, while the S&P 500 was off 0.3%.

The three companies didn't immediately respond to a request for comment.

Trump has said he wants to protect and grow the domestic car business. Tariffs, in theory, are designed to bring manufacturing back to the U.S. Still, many finished cars and car parts cross the Mexican and Canadian border as part of the production process-and have for decades. That means tariffs essentially represent increased costs and extra work to rearrange supply chains for U.S. auto makers.

Tariffs reduced GM's 2025 operating profit of $12.7 billion by roughly $2 billion, according to the company.

Higher import tariffs also bring the promise of higher domestic steel prices. That also represents a cost increase for auto makers.

U.S. steel stocks were early winners in the escalating trade spat. Shares of Steel Dynamics were up 3.6% in early trading. Nucor stock was up 4.3%. Cleveland-Cliffs shares gained 7.1%.

Things had been relatively quiet on the automotive tariff front for much of 2026. Now more uncertainty lies ahead, and that is never good news for stocks.