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US President Donald Trump granted US automakers Ford (F), GM (GM), and Stellantis (STLA) a one-month exemption from tariffs on imports from Mexico and Canada. The temporary exemption offers some relief to the automakers as the industry is heavily exposed to Trump's tariffs.
Bernstein senior analyst Daniel Roeska joins Morning Brief with Seana Smith to share his view of the auto industry. He tells Yahoo Finance that Trump's tariffs may actually have the opposite effect the president intends in the longer term.
Roeska says, "I would argue that a couple of weeks of tariffs is something the industry can sustain with some downside, but it wouldn't be the worst-case scenario."
In regards to tariff impacts, Nobel Prize-winning economist Paul Krugman told Yahoo Finance the notion of US manufacturing has broadened to encompass North American manufacturing.
"If [Trump's tariffs] really [extend] the difficulty becomes you can reallocate some production ... expanding a little bit the production capacity in the US on the margins in individual cases is possible, but I simply do not see how any executive right now could make a decision to build a $4 billion plant for 200,000 or 300,000 more cars in the US, with the uncertainty [around the longevity of the tariffs]," he outlines.
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Recent forecasts have anticipated the price of new cars and trucks within the US to rise by $12,000 due to tariffs.
The analyst explains, "The bigger long-term risk here is actually that the uncertainty of the current situation prevents any decision on investments in the US."
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This post was written by Naomi Buchanan.