Market Musings 3/27/2025
Quick thoughts on the markets and major portfolio news. Not on Ursa yet? Download Ursa from the App Store!
Are harsh auto #Tariffs a preview of the “targeted” announcements coming next week?
Well, that flexible #Tariffs optimism didn’t last long…
The White House announced 25% #Tariffs on imported vehicles as well as auto parts. These #Tariffs will go into effect midnight on April 3rd.
After popping 2% to start the week, markets gave most of it back after harsh auto #Tariffs were announced.
So, what’s the impact? Well, obviously automakers are feeling it…
To manage costs, many factories are specialized for certain parts or vehicle models. Large automakers have expansive production footprints to service global markets.
These #Tariffs will require US manufacturing of both primary parts and assembly to avoid impact. In particular, General Motors is particularly exposed with a wide-spread North American manufacturing footprint. Unfortunately, that exposure will likely spread…
Consumers are likely to bear the brunt of the #Tariffs costs. Analysts have estimated the average car’s price could increase by $5 to $10K. In addition, the ecosystem could also likely see impact on car repairs and maintenance costs as well as insurance.
However, we can also see retaliation further compound the problem. Other countries like Canada and Japan have already vowed to fight back. We could see other countries retaliating with #Tariffs on assembly and parts made in the US and sent to them for sale or even retaliate on other goods outside of the auto.
Unfortunately, the US’s response, so far, to any retaliation as been threats for harsher #Tariffs retaliation in return which can cascade into a trade war.
So, these #Tariffs were focused on the auto industry and were “targeted”, not broad. However, it’s still harsher than the market expected and more encompassing within that industry－investors seemed to be taken by surprise that the #Tariffs included component parts as well.
What was a positive signal just a few days ago as turned negative with a supposed barrage of more “targeted” #Tariffs coming next week. We see negative sentiment building with markets closing near the day’s low. While we might of had a small reprieve from the #Tariffs drama last week, it seems it’s back and will likely dominate market headlines going into and through April.
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As of the publish date, Ursa portfolios may own GM. The stocks mentioned in this article may cease to be owned by Ursa portfolios at any point.
The statements, opinions and analyses presented here are provided as general information. This article is the opinion of the author. Anything within this article should NOT be considered an investment recommendation or advice. See Ursa’s full disclosures here.
Original Photo by Pixabay.