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Ford Motor Co. would feel a serious impact if tariffs are levied on the cars, engines and transmissions it imports from Mexico, but a top executive at the automaker expressed optimism the trade dispute can be resolved without lingering damage.

The U.S. trade deficit narrowed in April as exports and imports tumbled, highlighting the impact of President Donald Trump’s tariffs even before negotiations with China unraveled and he threatened levies on Mexican goods.

Volkswagen AG’s main car brand will let lapse as many as 4,000 general and administrative jobs while adding at least 2,000 IT positions over the next four years, avoiding layoffs at its German factories as it negotiates a major shift toward electrification and self-driving cars.

The largest U.S. automaker can’t get a pass on tariffs snagging one of its models. The Trump administration refused to grant General Motors Co. an exclusion for its Chinese-built Buick Envision SUV, keeping in place a 25% duty on the import.

The U.S. average retail price of diesel dropped 1.5 cents to $3.136 a gallon, the Department of Energy reported. Crude oil plunged to $53 a barrel and flirted with a bear market as the tensions surrounding international trade mounted.

Economists and transportation experts warned that if tariffs against Mexico are enacted, consumers over several months would see price increases at grocery stores — especially on fruits and vegetables imported from Mexico — and suppliers would source those items from other countries.

U.S. oil refiners could get hit if crude is included in President Donald Trump’s threatened 5% tariff on Mexican goods, although the effect may be tempered by their growing fuel exports.

U.S. automakers and parts suppliers were among the sectors hit hardest in early trading May 31 after President Donald Trump’s threat to impose a tariff of up to 25% on Mexican goods. General Motors Co. and Ford Motor Co. each fell more than 3%.

President Donald Trump said that he would impose a 5% tariff on Mexican goods until that country stops immigrants from entering the U.S. illegally.

After months of predicting a trade deal between the world’s largest economies, economists at some of the biggest financial institutions are growing increasingly pessimistic.