Temporary one-month tariff delay for automakers causes stock price rebound, but long-term impact uncertain

From Nasdaq: 2025-03-06 09:48:00

President Donald Trump’s 25% tariff on Canadian and Mexican imports rattled the automotive industry, causing a drop in most auto stocks. A one-month exemption for complying U.S. automakers under the USMCA was later announced, leading to a temporary stock price rebound for companies like Ford, GM, and Stellantis.

Although the exemption provided a momentary respite, it does not eliminate the uncertainty ahead. Reports indicate that tariffs could raise vehicle prices by up to $12,000 for cars not yet imported. This poses a significant challenge for consumers facing already high vehicle costs.

Trump’s tariffs could potentially increase the average new car price by $3,000, with full-size pickup trucks facing hikes of up to $10,000. The current surplus of new car inventory offers a brief opportunity for consumers to purchase vehicles at pre-tariff prices before the expected price increases take effect.

The complex supply chain connecting North American economies means automakers like GM, Ford, and Stellantis face varying exposure to tariffs. With Mexico and Canada contributing a significant portion of components, the industry could see production slowdowns, job losses, and price increases if tariffs continue long-term.

While the one-month exemption provided a momentary boost to auto stocks, the long-term impact remains uncertain. Automakers, suppliers, and consumers could face higher costs once the exemption ends. The industry is bracing for potential challenges and disruptions if tariffs persist without a resolution.



Read more at Nasdaq: Will Trump’s One-Month Tariff Delay for Automakers Be of Much Help?