U.S. President Donald Trump announced Monday that tariffs on automobiles are imminent, though not all tariffs will be enforced by April 2.
What Happened: During a White House briefing, Trump mentioned that some countries might receive tariff exemptions, but he did not provide specific details, reported Reuters.
Trump also introduced a 25% secondary tariff on countries purchasing oil or gas from Venezuela, a move that has already impacted global oil prices.
According to a White House official, the timing for sector-specific tariffs on industries like automobiles, pharmaceuticals, and semiconductor chips remains undetermined.
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The official emphasized that the president is committed to implementing strong reciprocal tariffs.
Earlier reports from Bloomberg and the Wall Street Journal indicated that the administration might delay certain sector-specific tariffs initially set for April 2.
U.S. stocks rose on Monday, with the S&P 500 index climbing nearly 1.8%, as investors speculated that the tariffs might be less extensive than previously feared.
Trump also highlighted a $21 billion investment by Hyundai Motor Group (OTC:HYMLF) in the U.S., including a $5.8 billion steel plant in Louisiana. He described the upcoming tariffs as a “Liberation Day” for the U.S. economy, aiming to reduce the $1.2 trillion global trade deficit.
Why It Matters: The announcement of impending tariffs on the automotive sector is not unexpected. Jim Cramer noted that these tariffs were inevitable, especially given the high volume of imports.
The Trump administration had previously provided a one-month exemption to automakers under the United States-Mexico-Canada Agreement.
The uncertainty surrounding these tariffs poses a significant risk to U.S. automakers. Goldman Sachs analyst Mark Delaney warned that tariffs could lead to reduced vehicle production and increased costs for imported parts, affecting earnings for companies like Ford Motor Co. (NYSE:F) and General Motors Co. (NYSE:GM).
Moreover, the potential increase in vehicle prices, estimated at $12,000 more per car, could negatively impact auto sales.
Despite these concerns, some political figures, like Ohio GOP Senator Bernie Moreno, support the tariffs, believing they are worth the short-term economic pain for broader policy goals.
Check out more of Benzinga’s Future Of Mobility coverage by following this link.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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