The stock prices of U.S automakers surged on Wednesday following President Donald Trump’s announcement to delay new tariffs on vehicles imported from Mexico and Canada for one month.
The White House disclosed that the temporary exemption was granted in response to appeals from industry leaders and it is expected to provide a brief reprieve for an industry grappling with potential cost surges.
The delay affected all automobiles and compliant auto parts under the United States-Mexico-Canada Agreement (USMCA) and was confirmed by White House Press Secretary Karoline Leavitt.
“Reciprocal tariffs will still go into effect on April 2, but at the request of the companies associated with USMCA, the president is giving them an exemption for one month so they are not at an economic disadvantage,” Leavitt stated.
Stellantis NV shares surged by 9.2%, the highest one-day gain since March 2022 while General Motors Co. saw its shares climb 7.2% and Ford Motor Co. experienced a 5.8% gain on the New York Stock Exchange.
The temporary relief also buoyed investor sentiment, easing fears of immediate supply chain disruptions and potential price increases that could have stemmed from the 25% tariffs initially set to begin this month.
Industry leaders, which include Ford Executive Chair Bill Ford and GM CEO Mary Barra, met with administration officials earlier in the week to appeal for the delay to allow automakers time to adjust supply chains and minimize potential economic impacts.
The United Auto Workers union, representing tens of thousands of auto manufacturing employees, also supported the move, emphasizing that a temporary pause would help protect jobs while negotiations continue.
Analysts suggest that the reprieve is part of a broader strategy by the Trump administration to encourage U.S.-based production.
“This delay buys time for automakers to present detailed investment plans in the U.S.,” said Daniel Ives, an equity analyst at Wedbush Securities. “It’s a strategic play to ensure that these companies keep expanding their manufacturing footprint domestically.”
The tariff exemption, however, is temporary. If no resolution is reached by April 2, the new tariffs could still take effect, potentially leading to higher vehicle prices and straining U.S. manufacturers already dealing with elevated input costs and supply chain constraints.
In addition to the automotive sector, the White House is reportedly considering similar temporary exemptions for certain agricultural products amid rising tensions over trade policies with Mexico and Canada.
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