Trump grants auto tariffs exemption, stocks surge

Kaityn Mills
3 Min Read
Auto Surge

US stocks rallied on Wednesday after President Donald Trump announced a one-month exemption for automakers from his new tariffs on Mexican and Canadian imports. The move relieved companies like Ford, General Motors, and Stellantis, which owns Chrysler, pushing their stocks up over 5%. The S&P 500 rose 1.1%, the Dow Jones Industrial Average climbed 485 points, or 1.1%, and the Nasdaq Composite gained 1.5%.

The market turned sharply higher after the White House confirmed the tariff exemption, injecting fresh optimism and hope that Trump may avoid triggering a severe trade war. “We spoke with the Big Three auto dealers. We will give a one-month exemption on any autos coming through USMCA,” Trump said in a statement read by White House Press Secretary Karoline Leavitt at a press briefing.

 

The announcement is welcome news for investors looking for signs that the administration might further negotiate or roll back its tariff policies. The relief stems from concerns that the tariffs would have significantly increased costs for automakers and potentially elevated prices for consumers.

 

Tariff exemption boosts auto stocks.

Despite the positive turn, the market experienced a tumultuous week, with the Dow tumbling 1,300 points across Monday and Tuesday, largely driven by Trump’s enactment of tariffs and subsequent retaliation from trading partners. The S&P 500 erased its gains since Trump’s reelection in November. With Canada, Mexico and China now retaliating, trade tensions have escalated, increasing inflation risks and market volatility,” said Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management.

 

The rebound on Wednesday recouped some of the week’s earlier losses, but the S&P 500 is still off its previous record high, reached just two weeks ago. Crude oil prices also tumbled due to concerns about a brewing trade war and OPEC+ oversupplying the market. Kevin Gordon, a senior investment strategist at Charles Schwab, said the back and forth with tariffs has created uncertainty for investors, businesses, and consumers.

“Uncertainty is the policy at this point,” Gordon said. The development brought some stability to a jittery market. However, experts point out that the economic and consumer impact is still ahead, and it remains uncertain how long these tariffs will stay in place.

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Kaitlyn covers all things investing. She especially covers rising stocks, investment ideas, and where big investors are putting their money. Born and raised in San Diego, California.