Topline
President Donald Trump’s administration signaled it would move to lower or alleviate some of the tariffs paid by automakers looking to manufacture vehicles domestically, prompting automaker shares to inch up briefly in premarket trading early on Tuesday before they slid sharply again as General Motors pulled its forecast for 2025 due to tariff uncertainty.
Trump will ease tariff rates on foreign made components needed to manufacture domestic vehicles.
Key Facts
According to the Wall Street Journal, which first reported on the matter, Trump’s plan will indirectly lower tariffs on foreign-made auto parts needed to manufacture cars in the U.S.
From May 3, automakers will need to pay 25% tariffs on foreign-made auto components, but a reported tweak to the rule will allow them to seek reimbursement for those levies for an amount up to 3.75% of the value of a domestically manufactured vehicle.
This reimbursement percentage will be lowered next year and then fully dropped a year later.
Car makers who manufacture their vehicles domestically will also be given a special reprieve from paying the 25% tariffs on aluminum and steel imports, to avoid multiple duties from stacking on top of each other.
The report said the changes will be retroactive and automakers who have already started paying levies on steel and aluminum imports will likely be refunded.
Get Forbes Breaking News Text Alerts: We’re launching text message alerts so you’ll always know the biggest stories shaping the day’s headlines. Text “Alerts” to (201) 335-0739 or sign up here.
How Have U.s. Auto Stocks Reacted?
In pre-market trading early on Tuesday in the U.S., Ford’s New York Stock Exchange-listed shares were up around 1% to $10.12. General Motors shares saw a smaller spike of 0.57% in early trading, with its price hitting $47.51. However shares of both companies tanked shortly after General Motors released its Q1 2025 earnings, where it pulled forecast for 2025 due to uncertainty over tariffs. Since the earnings release, GM’s shares are down more than 2.4% to $46 while Ford shares remained flat at $10.
How Have Asian And European Auto Stocks Fared?
The Tokyo-listed shares of Honda closed around 1% higher at $10.17 (¥1,452), while Toyota’s shares surged more than 3.5% to $19.51 (¥2,786) on Tuesday. In Europe, shares of Italian-American automaker Stellantis—which makes Chrysler, Dodge and Ram vehicles—were up 1.62% to $9.50 (€8.35).
What Has The Trump Administration Said About The Reported Tariffs Changes?
While the deal has not officially been announced by the White House yet, Commerce Secretary Howard Lutnick alluded to it in a statement shared with various media outlets. “This deal is a major victory for the president’s trade policy by rewarding companies who manufacture domestically, while providing runway to manufacturers who have expressed their commitment to invest in America and expand their domestic manufacturing,” Lutnick said.
Further Reading
Trump to Soften Blow of Automotive Tariffs (Wall Street Journal)
Source: https://www.forbes.com/sites/siladityaray/2025/04/29/auto-stocks-inch-up-after-trump-administration-signals-they-may-get-some-tariff-relief/