U.S. auto stocks are surging on news that President Donald Trump granted a one-month tariff exemption for motor vehicle manufacturers.
The stocks of General Motors (GM), Ford Motor Co. (F), and Stellantis (STLA) are each up more than 5% in afternoon trading on news of the tariff pause. The stock of electric vehicle maker Tesla (TSLA) is up 2% following the announcement from the White House.
The one-month tariff pause comes after Trump spoke with the heads of General Motors, Ford and Stellantis. The president also said on social media that he spoke to Canadian Prime Minister Justin Trudeau, a call he characterized as “somewhat friendly.”
Wiggle Room
News of the reprieve for automakers comes as a relief given how integrated the industry is between the U.S., Canada and Mexico. Ford CEO Jim Farley has warned that America’s 25% tariffs on imports from Mexico and Canada would be devastating for the automotive sector. U.S. stock markets rallied on news of the one-month pause, with the blue-chip Dow Jones Industrial Average rising more than 500 points.
Comments from U.S. Commerce Secretary Howard Lutnick indicate that there might be more wiggle room on tariffs moving forward. Speaking to Fox News, Lutnick said that there could be a one-month delay on tariffs for industries that are abiding by the United States-Mexico-Canada Agreement on trade, which was signed during Trump’s first term in office.
The U.S. Commerce Secretary has also said that the Trump administration is willing to negotiate with Canada and Mexico on import tariffs and potentially meet America’s neighbors “in the middle” when it comes to trade relations.
Is TSLA Stock a Buy?
Let’s take a look at arguably the most popular automotive stock, Tesla. As one can see in the chart below, Tesla stock currently has a consensus Hold rating among 35 Wall Street analysts. That rating is based on 13 Buy, 12 Hold, and 10 Sell recommendations issued in the last three months. The average TSLA price target of $346.72 implies 24.72% upside from current levels.
