Global Car Manufacturers Rally After Trump Signals Tariff Relief Plans

Share prices of international automotive manufacturers experienced a notable surge following President Trump’s indication that he might explore temporary exemptions to his recently imposed vehicle and parts tariffs.

The president’s remarks to reporters suggested manufacturers would receive “a little bit of time” to relocate manufacturing operations to American soil, stating he was “looking at something to help car companies”. While specific details regarding product exclusions and timeframes remained undisclosed, the news provided welcome relief to automotive stocks, which had previously declined following Trump’s 25 per cent levy introduction in March.

Japanese manufacturers witnessed significant gains, with Toyota climbing 3.7 per cent and Honda advancing 3.6 per cent. British luxury car manufacturer Aston Martin Lagonda led the FTSE 250 risers, gaining 4.9 per cent to reach 68¾p during morning trading. Despite lacking US-based manufacturing facilities, the American market represents nearly one-third of Aston Martin’s sales volume. The company recently announced plans to raise £125 million partly to address tariff impacts.

European automotive shares also demonstrated strong performance. Stellantis rose 5.6 per cent to €8.26, while French parts manufacturer Valeo increased 4.3 per cent to €7.99. German manufacturers showed similar momentum, with Volkswagen gaining 3.3 per cent to €90.26 and Mercedes-Benz advancing 2.9 per cent to €50.7.

The current 25 per cent tariff on completed vehicles, implemented on April 3, is scheduled to expand to include imported car parts by May 3. This development carries particular significance for the UK automotive sector, as the US represents Britain’s second-largest export market, accounting for 16.9 per cent of exports in 2024, equivalent to approximately 100,000 vehicles, according to SMMT data.

The impact of these tariffs has already prompted strategic responses from major manufacturers, with Jaguar Land Rover temporarily suspending all US-bound vehicle shipments for a month while developing a long-term strategy to address the new trade environment.