It might be time to finally figure out that local bus route.
President Trump dropped a surprise round of tariffs yesterday evening—this time a 25% levy on all auto imports that will begin April 3 in the name of bringing domestic auto manufacturing back to its former glory. He also added the same levy on automobile parts beginning on May 3.
Predictably, cars are about to get a lot pricier for everyone—as much as $10,000 more expensive, according to Bank of America analysts. And the price hikes will span the affordability spectrum: Even Ferrari is raising prices.
As you would expect, these tariffs are hitting the auto industry like a truck. But some names are better prepared to weather the storm than others:
- General Motors fell 7.32% today. The largest US automaker imports many of its best-selling vehicles—about 40% of its sales in the US last year were from vehicles assembled abroad.
- Porsche's Frankfurt-listed shares declined 2.51%, as the new tariffs could erase roughly a quarter of the company’s projected 2026 earnings, according to Bloomberg Intelligence data.
- Bloomberg expects the same for Mercedes, which dropped 2.69% in Frankfurt.
- Ford fell 3.93%, though this carmaker could actually fare a bit better than some competitors: It makes roughly 80% of its vehicles within the US.
- Tesla, meanwhile, gained 0.39% on the news. Elon Musk’s EV-maker produces its vehicles in the US already, giving the company a potential competitive edge.
Swerving away from the damage
These tariffs won’t just hit cars—they’re going to crash through a wide swath of auto-related industries, including insurance, the used car market, and maintenance.
Making sense of market moves
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But that doesn’t mean your investments necessarily have to hit a speed bump. Most analysts acknowledge that there are a lot of question marks right now—including whether these tariffs will even be implemented at all.
“We continue to believe this is some form of negotiation and these tariffs could change by the week although this initial 25% tariff on autos from outside the US is almost an untenable head scratching number for the US consumer,” wrote Wedbush analyst Dan Ives today.
But some analysts are still bullish on some of the names hit the hardest by the tariffs. JPMorgan analyst Ryan Brinkman argued that in the long term, tariffs could contribute to automakers like GM and Ford boosting domestic manufacturing and actually increase their pricing power.
Talk about a bumpy road ahead.—LB