Investing.com – Shares in General Motors initially fell more than 1% in pre-market trade on Tuesday on a knee-jerk reaction after President-elect Donald Trump threatened to tax the automaker for making cars in Mexico.
“General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border,” Trump said via his Twitter account.
“Make in U.S.A. or pay big border tax!” he warned.
General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border. Make in U.S.A.or pay big border tax!
— Donald J. Trump (@realDonaldTrump) January 3, 2017
As part of his political campaign that won him the presidency on November 8, Trump had constantly warned that he would punish companies with high tariffs if they don’t move production to the U.S..
After the initial slump, shares in GM (NYSE:GM) pared losses and were last down 0.66% at $34.60 by 8:16AM ET (13:16GMT) compared to last Friday’s official close at $34.84.
Investors have been keeping a close eye on Trump’s Twitter account as they try to get a feel for what fiscal policies the incoming President will pursue when he takes office on January 20.
GM’s share drop is not the first instance of the President-elect moving company shares based on policy comments.
Shares in Lockheed Martin (NYSE:LMT) fell 2.47% on December 12 when Trump critiqued the cost of its F-35 fighter jet program.
"The F-35 program and cost is out of control," Trump wrote that day on Twitter, echoing campaign promises to cut waste in federal spending.
"Billions of dollars can and will be saved on military (and other) purchases after January 20th."
Several analysts have previously recommended following Trump’s Twitter account to get ahead of sharp market moves based on his comments.
“I don’t follow anyone on Twitter, but think I need to set-up another account to follow Trump, especially as the Trump Dance continues,” S&P Dow Jones Indices senior index analyst Howard Silverblatt.