In This Article:
Auto parts suppliers, such as Magna International (MGA), Dana Incorporated (DAN), and Genuine Parts (GPC), face uncertainty following President Trump's announcement of new tariffs on cars and car parts, set to take effect next week and May 3rd, respectively.
Morning Brief hosts Brad Smith and Madison Mills discuss the details.
To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
We got to take a look at auto part suppliers here on the day. We've got a roundup here for you on the side of your screen, as you can see. We're mixed right now, but following President Trump's announcement that he will impose 25% tariffs on cars and car parts that are not made in America, the duties on cars are set to take effect next week, while those on car parts are expected on May 3rd here. So keeping a close eye on the auto part suppliers here, even though they are mixed, you're seeing two of those, mainly in Magna International and Dana Incorporated, both moving to the downside on this news. The complexity here around this is really trying to gauge how much of the prices of cars will rise because of tariffs, but on top of that, parts that originate, as well, we should note in the US, then go into Canada or Mexico for production and then make their way back into the US, uh, haven't previously been uh, been subject to some of these or the tariffs haven't been as high on them, um, because of where the parts originate from and then move back in. Uh, we do know that there have been a lot of focus on this from the different unions or the automakers representations as well. UAW Auto Workers Union Sean Fan here praised the move here specifically, but it's really remaining to be seen, of course, until that point in time of whether or not these actually go into effect, what that net pass through would be to the consumers as well.
And I think Brad, you you lay it out so well in terms of those individual names and what's important, I think, for our audience to remember is that this is kind of like a layer cake situation when it comes to these tariffs. They're all going to get layered on top of one another. So when it comes to the auto part sellers in particular, they're already going to be hit by the likes of steel and aluminum tariffs and then they're also going to be hit by these individual country tariffs as well here. I also want to just quickly note on the broader sector, JP Morgan this morning downgrading a couple of stocks here. Open Lane Car Gurus and True Car, but what I I wanted to point out here is the broad point that this analyst makes calling the tariffs unequivocally negative for the entire ecosystem near and medium term. So that's going to be negative for the likes of of these companies that we have here on screen from auto part suppliers and some other automakers as well.