The stock prices of major Detroit automakers saw an increase following a report about potential tariff relief on U.S. vehicle production. According to the report, President Donald Trump is contemplating “significant tariff relief” to aid domestic manufacturing.
Details of the Tariff Relief Report
This report, attributed to Republican Senator Bernie Moreno from Ohio, indicated that the proposed changes could substantially reduce costs for major automotive companies. Senator Moreno noted that the relief would encourage global car manufacturers to maintain final assembly in the United States.
Stock Performance
- General Motors (GM) shares rose 1.3%, closing at $60.13.
- Ford Motor Company saw a significant increase of 3.7%, closing at $12.67, reaching a 52-week high.
- Stellantis stocks increased 3.2%, ending the day at $10.73.
- Tesla stock slightly declined by 1.4%, closing at $429.83.
Other automotive companies, such as Honda and Toyota, also experienced positive stock movements due to the news of potential relief.
Current Tariff Situation and Impacts
The automotive industry has been facing challenges due to Trump’s existing tariffs, which impose a 25% charge on imported vehicles and parts. These tariffs have been detrimental, costing automakers billions in incremental expenses.
- Ford projected $3 billion in tariff-related costs for this year, hoping to reduce some of these expenses.
- GM estimated its gross tariff-related costs to be up to $5 billion, with plans to avoid at least 30% of this burden.
Future Implications
If implemented, the new tariff policies might include extending a 3.75% tariff offset for five additional years and incorporating U.S. engine production into the relief measures. This strategic shift could significantly benefit major domestic auto manufacturers, fostering growth and stability in the U.S. automotive sector.
