Shares in US and global automakers have risen sharply after President Donald Trump signalled he may offer temporary relief from recently imposed automotive tariffs, aimed at giving manufacturers more time to localise production.
During a White House meeting with El Salvador’s President Nayib Bukele on Monday, Trump said he was “looking at something to help some of the car companies,” particularly those shifting away from foreign-made parts.
“They’re switching to parts that were made in Canada, Mexico and other places, and they need a little bit of time because they’re going to make them here,” Trump said. “So I’m talking about things like that.”
His remarks sent shares of Ford, General Motors and Stellantis—parent of Chrysler—up between 3% and 6% during midday trading. Rivian also climbed 4%, while Toyota and Honda rose around 2%. Tesla bucked the trend, dipping 1%.
Trump imposed a 25% tariff on imported vehicles on April 3, with a second wave of duties on car parts scheduled to begin no later than May 3. Although exemptions have been granted to Apple and other tech firms, the automotive sector has so far remained exposed.
A senior auto executive described Trump’s comments as “some recognition that this is getting tough for the industry.”
Trump’s latest remarks represent a potential shift in an already volatile trade policy landscape. Over recent months, he has repeatedly modified tariff timelines and carve-outs. A baseline 10% tariff on all imports and reciprocal duties on dozens of countries—including China, Japan, and the EU—have added complexity for global supply chains.
In the automotive sector, the impact has been acute. Automakers have responded with temporary discounts, halted shipments, and strategic capacity changes. Jaguar Land Rover has stopped US deliveries entirely, while Hyundai has promised no immediate price hikes. Ford and Stellantis are offering employee pricing to offset the pressure.
GM has increased output at its Fort Wayne pickup truck plant in Indiana and scrapped planned downtime at its Tennessee facility. “The previously announced downtime for the week of May 12 is being rescinded, which means full production… will run as normal,” a message to staff read. The plant produces several Cadillac crossovers.
Industry data suggests the fallout could be severe. Analysts at Telemetry forecast a loss of 1.8 million new car sales in the US this year due to tariffs. S&P Global Mobility projects total light vehicle sales will drop to between 14.5 and 15 million, down from 16 million in 2024.
Trump defended his tariff strategy as part of a broader push to revitalise American manufacturing. “I don’t change my mind, but I’m flexible,” he told reporters, referencing recent concessions made to Apple CEO Tim Cook. “You have to be. Sometimes you have to go around [the wall], under it or above it.”
Despite calls for stability, Trump has hinted at further action. Over the weekend, he previewed new tariffs on pharmaceutical imports and suggested tech product exemptions may be short-lived, warning of future sector-specific duties.
