Trade-Deal Hopes Lift Global Automakers' Stocks
Trump late Tuesday said that Japan would face 'reciprocal' tariffs of 15%, rather than the 25% he had earlier threatened would take effect on Aug. 1. According to The Wall Street Journal and Japanese press reports, Japan has also negotiated a reduction in auto tariffs to 15%. That would cut the tariff on Japan's car exports to the U.S. to 15%, from the 25% tariff Trump imposed on on all foreign-made vehicles and car parts in early April.
The news lifted shares in Japanese carmakers Toyota (TM) and Honda (HMC), which were up by double-digit percentages in Wednesday afternoon trading.
The Big Three automakers also saw price gains. General Motors (GM), which this week warned it could face a bigger headwind from tariffs in the second half of the year, was up 8%. Chrysler and Jeep maker Stellantis (STLA), which posted a first-half loss Monday on the back of increased duties, gained 11%. Ford (F), which suspended its full-year guidance in May citing an unpredictable tariff outlook, were rising 2%.
The Big Three automakers produce cars and car parts in Canada and Mexico in highly intricate supply chains. Investors may be hoping for deals with those countries next.
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