Auto stocks jumped on Monday afternoon after President Trump hinted tariff relief might be coming.
“I’m looking at something to help some of the car companies, where they’re switching to parts that were made in Canada, Mexico, and other places, and they need a little bit of time because they’re going to make them here,” Trump said, adding that “they need a little bit of time, so I’m talking about things like that.”
Read more about auto stock moves and today’s market action.
Trump didn’t say whether relief was coming for the 25% tariffs already in place for foreign auto imports or the 25% auto parts tariffs that will be finalized by May 3. Even auto imports covered by the USMCA between the US, Mexico, and Canada are subject to tariffs, but parts originating from the US can be backed out of the tariff calculation.
Shares of Big Three automakers General Motors (GM), Stellantis (STLA), and Ford (F) all popped over 3% Monday.
Recently, automakers have been scrambling to respond to the daily drip of tariff escalations that began once Trump started his tariff war in earnest following his April 2 “Liberation Day” event.
Read more: What Trump’s tariffs mean for the economy and your wallet
“Across OEMs, we are beginning to see a dispersion of reactions, ranging from immediate price discounts in the near-term (Ford + Stellantis), to others that will hold prices constant at least for the next 1-2 months before [reevaluating the] situation,” Deutsche Bank analyst Edison Yu wrote in a note to clients last week. “There is also some capacity re-alignment occurring including GM raising output at its Fort Wayne facility and Stellantis pausing some plant operations in Mexico/Canada.”
The effects of tariffs on auto imports and the critical supply chain for parts would hurt the consumer with significantly higher prices.
Analyses from various data firms suggest price hikes of $3,000 to as much as $12,000 for non-premium autos, which is expected to result in a meaningful loss in sales.
A report from auto research firm Telemetry finds that the US will lose 1.8 million new car sales due to tariffs this year. Cox Automotive’s Kelley Blue Book estimated that 15.8 million new cars and light trucks were sold in the US last year.
Echoing Telemetry, S&P Global Mobility expects US light-vehicle sales to fall to between 14.5 million and 15 million units annually from 16.0 million vehicles it estimates were sold in 2024.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on X and on Instagram.
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