- The Trump administration plans to delay auto tariffs by up to six months, according to multiple news outlets.
- The reports sent shares of Ford,General Motors, Tesla, and Daimler higher on Wednesday.
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The Trump administration plans to delay its decision on automobile tariffs for up six months, multiple news outlets reported Wednesday, citing anonymous sources. The administration had been expected to decide by Saturday whether to implement tariffs as high as 25% on imported cars and auto parts.
The reports sent auto stocks higher on Wednesday.
Shares of Ford and General Motors gained as much as 1.6% and 1.4% in midday trading. Shares of Mercedes-Benz’s parent, Daimler, went positive on the session, and those of the electric-car maker Tesla climbed off session lows but remained in negative territory.
Wednesday’s reports come at a tense moment for US-China relations, with the trade war between world’s two biggest economies escalating in the past week.
On Friday, the US raised tariffs on $US200 billion worth of Chinese goods to 25% from 10%. In a retaliatory measure, China on Monday said it would hike tariffs on $US60 billion worth of US goods.
Wednesday’s news appears to merely delay, though not resolve, the issues between the US and its international trading partners, Morgan Stanley strategists said in a note sent out to clients on Wednesday. They believe the tariffs are likely to come later this year.
“If this holds, we would characterise this as a modest positive,” Michael Zezas and Meredith Pickett said, adding that the delay would “somewhat reduce” the odds of tariffs taking effect, with either side possibly moderating its positions.
“However, the core impasse driving the tariff tension, whether or not to include agricultural issues in negotiations, remains between the EU and US,” they said.
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