Key Takeaways
- Shares of the Big 3 carmakers moved higher on word the U.S and China have struck a deal to cut tariffs.
- Automakers were considered very vulnerable to the trade fight because of their use of Chinese parts.
- General Motors had warned of billions in additional costs because of the tariffs, while Ford Motor and Stellantis suspended their outlooks.
Shares of the “Big Three” automakers advanced Monday on news the U.S. and China had agreed to a trade deal that would slash tariffs imposed by each side for 90 days.
Carmakers were considered especially susceptible to the tariffs because of their use of Chinese parts in manufacturing.
Earlier this month, General Motors (GM) warned that tariffs would cut its full-year profit by $4 billion to $5 billion. Ford Motor (F) suspended its full-year guidance because of uncertainties over the trade war impact, and Stellantis (STLA) did the same at the end of April.
News about the U.S.-China agreement sent shares of Stellantis, GM, and Ford up 8%, 4%, and 3%, respectively, soon before the opening bell.
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