Investing.com -- Shares of General Motors (NYSE: NYSE:GM) and Ford Motor (NYSE: NYSE:F) climbed 4% and 3% respectively, following a report from the Financial Times that President Donald Trump plans to exempt carmakers from certain tariffs on China imports. The automotive giants saw an uptick in their stock value as the market responded to the Trump administration's decision to spare the industry from some of the more burdensome tariffs, particularly those on car parts imported from China.
The move comes as a significant relief for the auto sector, which had been lobbying against the tariffs that were set to increase costs, disrupt supply chains, and potentially lead to job losses. While a 25% tariff on all imports of foreign-made cars will remain in place, the exemptions will alleviate some of the financial pressures by excluding car parts from additional tariffs on steel, aluminum, and imports from China aimed at countering fentanyl production.
This development represents a step back from President Trump's aggressive trade policies, which have been under intense scrutiny over concerns of their impact on the US economy, including the potential to raise car prices significantly. The automotive industry executives have been vocal in their criticism of the tariffs, with Stellantis (NYSE:STLA) chair John Elkann recently warning about the risks to the American and European car industries due to the trade policy.
The concessions by the Trump administration are seen as an initial victory for the auto industry, which has been pushing for further exemptions. This news also indicates a broader trend of the administration offering carve-outs to favored industries after facing backlash from global markets and warnings of a possible US recession.