In This Article:
Automakers like Ford (F), General Motors (GM), Stellantis (STLA), and Tesla (TSLA) are trading higher after a 90-day tariff pause between the US and China sparked hopes for broader relief.
Yahoo Finance Senior Reporter Pras Subramanian explains why optimism is building despite no changes yet to auto-sector tariffs.
To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here.
Auto companies among those moving higher today led by Tesla as the U.S. and China agreed to pause tariffs for 90 days. Although the auto sector was excluded from the deal, optimism still remains. Joining us now, senior autos reporter Pras Subramanian. So, what changes is it? Does anything change for the auto makers as a result of this?
Nothing's changed. It's all about optimism. Uh Dan Ives telling me that he, they hope that autos are next on the docket for any type of deal. Uh so currently we still have the 100% plus EV China EV tariffs are still in place right now. Uh you also have 25% parts and part and auto tariffs. So that nothing's changed but there's optimism growing that that will potentially be next for Trump and the team. But I mean, that's still a big if, right? And he hasn't mentioned anything about changing sector tariffs for autos at this moment. Uh and we hear, we heard about just this quarter how bad it could be, right? 4 to 5 billion for GM, 1.5 billion for Ford in terms of EBIT full year EBIT hits. And Toyota alone 1.3 billion in the last two months. So
Was it? Was Toyota the worst by the way? Is that?
Yeah, for April and May, they anticipated a 1.3 billion dollar hit to operating profits. So that's like giving us an idea of how bad it could be for them. So a a a deal with Japan could be a big deal for for the for U.S. because more likely than a deal with China for for sector autos.
And and just to be, so just to be clear, the 145% that was imposed the blanket tariff on China, that was not the tariff on auto parts. That was always just the 25%, correct? So it already wasn't the sort of that highest tariff that was out there.
Right. They had sort of hived off all the auto stuff to its own separate sort of sector tariff exactly 100%.
And a company like Tesla, the cars that sells in China makes in China. Yes. Right? So it doesn't really materially affect it. It's more about vibes I guess.
Yeah, but also there's parts that that they there are some parts that come from China that they use that they can't replicate here. So that's part of. But you're absolutely it's more about optimism and these vibes. It's what's coming up next. I think that's sort of why everyone's bidding up the auto makers right now.
