Shares of major global automakers rose on Tuesday following remarks from US President Donald Trump indicating potential relief for the auto industry from previously announced tariffs.
The president suggested that carmakers may receive additional time to adjust their supply chains before facing full enforcement of new trade measures.
“I’m looking at something to help some of the car companies,” Trump told reporters on Monday in Washington.
He acknowledged that companies “need a little bit of time” to transition production back to the United States from countries like Mexico and Canada. Japanese manufacturers, including Toyota and Honda, are among the largest producers operating in Mexico.
Following Trump’s comments, shares in Toyota, Honda, and Tata Motors climbed by 4.8%, 4%, and 4.5%, respectively. Broader market indices also reacted positively, with the pan-European STOXX 600 up 0.8% and Germany’s DAX gaining 1.3%. In Asia, Japan’s Nikkei rose 0.8%, led by automakers and parts suppliers.
The development is the latest in a series of adjustments by the Trump administration to its tariff strategy. Last week, electronics including smartphones and computers were temporarily exempted from newly imposed tariffs, providing a boost to market sentiment. These shifts come amid growing concerns over the economic impact of broad-based tariffs and their effect on global supply chains.
Despite earlier declarations that the 25% auto tariffs would be “permanent,” Trump indicated on Monday that his administration may be open to temporary exemptions or phased implementation.
“I don’t change my mind, but I’m flexible,” he said.
Matt Blunt, president of the American Automotive Policy Council — which represents Ford, General Motors, and Stellantis — welcomed the idea of flexibility, emphasizing that supply chain transitions require time.
“There is increasing awareness that broad tariffs on parts could undermine our shared goal of building a thriving and growing American auto industry,” he said.
Financial markets have responded cautiously to the evolving trade policy, with investors seeking clarity on future actions. Analysts noted that while the relief announcements have helped lift equities in the short term, the overall environment remains uncertain.
“The exemptions help, but markets remain wary of the next move,” said Illiana Jain, an economist at Westpac.
Elsewhere, bond yields held steady after Monday’s rebound, while oil prices and gold ticked higher amid continued geopolitical and economic uncertainty. Apple shares also saw modest gains following the electronics tariff reprieve, though concerns linger over future decisions impacting the tech sector.
Meanwhile, the European Union signaled continued engagement in trade negotiations. European Commissioner Maroš Šefčovič noted constructive talks with US officials and reiterated the EU’s willingness to work toward a reciprocal agreement on industrial tariffs.
As the Trump administration weighs further modifications to its trade policy, economists warn that the frequent policy shifts may already be impacting business confidence and investment decisions.
“The damage to consumer, business, and market confidence may already be irreversible,” said Carl Tannenbaum, chief economist at Northern Trust.
With input from the Financial Times, Reuters, and the Associated Press.
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