Ford, GM, and Other Auto Stocks Jump on Potential Tariff Relief

Shares of GM, Ford, Toyota, and Honda were higher on Friday. (SeongJoon Cho/Bloomberg)

Key Points

• President Trump is considering a plan to offer tariff relief to U.S. car manufacturers, according to a Reuters report.
• The proposed plan could extend a 3.75% offset on a vehicle’s retail price for five years and include U.S. engine production.
• Following the report, Ford’s shares rose 3%, GM gained 1.5%, Honda increased 2.7%, and Toyota was up 2.1%.

President Donald Trump is weighing a plan to offer tariff relief to companies that produce cars in the U.S., according to a Reuters report on Friday that quoted Republican Sen. Bernie Moreno and auto-industry officials.

The move could erase many of the levies that car makers now face.

Companies that assemble cars domestically, such as Ford Motor, Toyota Motor, Honda Motor, Tesla, and General Motors, would effectively be shielded from tariffs, the Ohio Senator said in the interview.

Shares in American car maker Ford shot up 3% following the article, while GM gained 1.5%. Shares of Japanese car makers Honda and Toyota were up 2.7% and 2.1%, respectively. Tesla fell 2% despite record quarterly deliveries released a day ago.

In June, the Commerce Department proposed to offset 3.75% of a vehicle’s suggested retail price for eligible U.S.-assembled models through April 2026, followed by a second year at 2.5%, to counter tariffs tied to imported auto parts.

Moreno told Reuters that Trump is considering extending the 3.75% offset to five years, while broadening eligibility to include U.S. engine production.

“It’s obviously up to the president, but absolutely thrilled that we’re creating now an incentive system that really separates these importers only versus the ones that are manufacturing in America,” Moreno said in the piece.

For most vehicles not covered under trade agreements, the U.S. imposes a tariff of 2.5% on passenger vehicles and 25% on light trucks. There are also varied tariffs on auto parts and a 50% levy on steel & aluminum imports, which could raise input costs for vehicles, even when made domestically.

Write to Evie Liu at evie.liu@barrons.com