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(Bloomberg) — Japanese automakers’ shares tumbled after US President Donald Trump pledged to impose tariffs against Canada and Mexico, with investors worried their operations may be upended considering many have factories south of the border from where they send cars into North America.

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Toyota Motor Corp. shares fell as much as 5.5% in early Tokyo trading on Monday, the biggest drop since September. Honda Motor Co. slid 7.5% while Nissan Motor Co. dropped more than 10.3%, the sharpest intraday decline since late December.

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Many of Japan’s legacy brands depend on North America as a crucial market, and sell cars there that were manufactured, assembled or imported over the Mexican border. Honda imports roughly 160,000 cars from Mexico to the US each year, a company executive said in November.

Trump is imposing 25% tariffs on imports from Mexico and Canada, citing an inflow of migrants and drugs, as well as large trade deficits. The levies are set to take effect at 12:01 a.m. Tuesday in the US.

If Honda’s cars “were to become subject to tariffs, that would have a big impact,” Executive Vice President Shinji Aoyama told reporters after reporting quarterly earnings in November. “Not just Honda but General Motors, Ford and other Japanese carmakers, too.”

Toyota would suffer ¥760 billion ($4.9 billion) in losses if it were to shoulder the costs of incoming tariffs, Citigroup Inc. analyst Arifumi Yoshida wrote in a report over the weekend. The impacts on other major brands would amount to ¥500 billion for Honda, ¥210 billion for Nissan and ¥110 billion for Mazda Motor Corp., Citigroup said.

In November, Toyota announced a $1.5 billion investment to renovate its facilities in Baja California and Guanajuato, Mexico to streamline production and delivery of its Tacoma pickup truck.

For Nissan, vehicles made in Mexico accounted for almost a quarter of its US sales in 2023, according to a spokesperson. These models included the Sentra, Versa, Kicks, QX50 and QX55.

The rest of Nissan’s US sales were produced domestically or imported from Japan.

(Adds updated shares, background throughout.)

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