During midday trading on Monday, shares of major automakers were soaring. This jump was just the latest results after President Donald Trump’s surprise comments last week from wanting to “bail out some of the car companies.” This statement has led to a wave of investor optimism, helping drive a bullish outlook for the entire automotive industry.
It was apparent to us that President Trump understands the current upheaval that automakers are facing and understands their need for some help. He remarked that the companies “need a little bit of time” to transition their production operations back to the United States. In spite of continuing automotive tariffs, the industry continues to get critical support. Introduced on April 3, these tariffs are a tough 25% tax on imported cars.
Because of Trump’s statements, stocks for Rivian Automotive doubled and increased by over 3% alone that day. In a corresponding reaction, Tesla’s shares dropped slightly, down by about 2%. Despite this drop, the overall sentiment in the market remained bullish, as investors reacted positively to the prospects of government support for the automotive sector.
Major automotive companies were the largest winners of this burst of inflationary investor excitement. At one point, Ford Motor’s stock soared 1% to 4%. At the same time, General Motors and Stellantis—the parent company of Chrysler—enjoyed similar increases. These significant increases are illustrative of a larger trend throughout the industry. Firms are already making moves to position themselves favorably in the ongoing chess match of international trade policy and tariff application.
Automotive tariffs are still ongoing. President Trump moved to lighten the tariff burden for most countries just last month. This historic move extends much-needed relief to all sectors. Modern tech companies—such as Apple—were granted exemptions from these levies over the course of the weekend. This action demonstrates the administration’s willingness to impose tariffs in many industries without adequate justification.
The automakers’ struggles President Trump’s statements this week underscore the intense headwinds the automakers are fighting against today. That’s why the stock market is responding so positively to the prospects of easing the burden of existing tariffs. In particular, investors will be focusing on how these announcements impact corporate capital allocation plans and broader market landscapes over the next several weeks.