President Donald Trump’s 25% tariffs on Canada and Mexico threw the U.S. auto industry into turmoil—until the White House announced a last-minute exemption for vehicles that meet USMCA rules of origin already compliant with the U.S.-Mexico-Canada Agreement (USMCA). According to Reuters, White House press secretary Karoline Leavitt confirmed, “We are going to give a one-month exemption on any autos coming through USMCA… so they are not at a disadvantage.” The delay has given automakers breathing room, but uncertainty looms as the April 2 deadline approaches.
Pickup Trucks at the Center of the Trade Battle
The auto industry’s concerns aren’t just about supply chains—they’re also political. Research from Global Data shows that about one-third of pickups sold in the U.S. are manufactured in Canada and Mexico. More importantly, pickup truck drivers are twice as likely to identify as Republicans than Democrats, according to an Edmunds survey. Now, the thing is, full-size pickups generate massive profits for General Motors, Ford, and Stellantis. As a result, industry executives are scrambling to negotiate a longer exemption.
Massive Price Hikes Could Hit Consumers
Automakers are warning that tariffs could add an average of $3,000 to vehicle prices, with some models seeing increases of up to $7,000, according to Wolfe Research. “Once the manufacturer starts passing on that cost to us, we’re going to have no choice but to pass it on” to consumers, said Jeff Tamaroff, Chairman of Tamaroff Auto Group. While dealers brace for impact, some industry leaders remain hopeful a deal will be reached before the exemption expires. Until then, the fate of American auto pricing remains in limbo.
Auto Stocks Face Potential Disruptions
The biggest U.S. automakers could take a hit if the tariffs go through, with General Motors (GM), Ford (F), and Stellantis (STLA) among the most vulnerable. GM’s Silverado and Stellantis’s Ram trucks rely heavily on Mexican production, while Ford builds some truck engines in Canada. According to Wolfe Research, these companies could see increased costs, and Barclays analysts estimate that up to 40% of U.S. vehicle parts come from Mexico.
Tesla (TSLA), which primarily manufactures in the U.S., could still feel the effects due to its global supply chain. Toyota’s North American operations, including RAV4 production in Canada, also face higher costs if the tariffs remain. Industry leaders are now waiting to see if negotiations can prevent a full-scale price surge across the auto sector.
Investors can compare Automaker Stocks using the TipRanks Stocks Comparison tool. In the comparison below, analysts are most bullish on Stellantis and General Motors. STLA stock is rated a Moderate Buy with an average price target of $14.45, implying a 14.5% upside potential over the next 12 months. GM is also rated a Moderate Buy, with an average price target of $46.97, implying a 27% upside potential over the next 12 months.
