Auto stocks rose Monday afternoon after President Trump hinted at possible tariff relief.
“I’m thinking about doing some help for some of the car companies that are switching to parts that are made in Canada, Mexico and other places, and it takes them a little while because they’re making them here,” Trump said, adding, “It takes them a little while, so I’m talking about things like that.”
Read more about auto stock moves and today’s market action.
Trump did not say whether he would remove the 25% tariffs already in place on foreign auto imports, as well as the 25% tariffs on auto parts that are set to be finalized on May 3. Even auto imports covered by the USMCA signed between the United States, Mexico and Canada are subject to tariffs, but parts originating in the United States are exempt from the tariff calculations.
Shares of the three major automakers General Motors (GM), Stellantis (STLA) and Ford (F) all rose more than 3% on Monday.
Automakers have been busy lately dealing with the tariff war that began after Trump’s April 2 “Liberation Day” event, and the tariffs are escalating every day.
“We are starting to see mixed responses from major OEMs, with some immediately reducing prices in the near term (Ford and Stellantis) and others indicating they will maintain prices for at least the next 1-2 months before reassessing the situation,” Deutsche Bank analyst Edison Yu wrote in a note to clients last week. “In addition, some capacity adjustments are being made, including GM increasing production at its Fort Wayne plant and Stellantis suspending operations at some of its plants in Mexico/Canada.”
The impact of tariffs on auto imports and key parts supply chains will lead to significant price increases, hurting consumers.
Analysis by multiple data firms suggests that prices for non-premium vehicles will increase by $3,000 to $12,000, which is expected to lead to a significant drop in sales.
A report from automotive research firm Telemetry found that the U.S. will lose 1.8 million new car sales this year due to tariffs. Cox Automotive’s Kelley Blue Book estimates that U.S. new car and light truck sales were 15.8 million last year.
In line with Telemetry’s forecast, S&P Global Mobility expects U.S. light vehicle sales to fall from 16 million in 2024 to between 14.5 million and 15 million per year.
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