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Shares of General Motors GM, Ford F, and Stellantis STLA climbed on Wednesday after a Bloomberg News report suggested that the Trump administration may delay auto tariffs on Mexico and Canada for one month.

GM shares gained 5%, Ford rose 4%, while Stellantis surged nearly 8%.

Despite today’s gains of 4% to 7% for the “Big Three,” only General Motors shares remain in positive territory over the past year.

On a year-to-date basis, all three stocks remain in the red.

Trump to extend tariff pause 

The Trump administration is considering a temporary pause on the recently imposed 25% tariffs following pleas from industry leaders, the report said, citing sources.

Senior administration officials met Tuesday with executives from Ford, GM, and Stellantis, with another White House meeting scheduled for Wednesday to discuss potential tariff relief.

A White House official told the business publication that the situation remains fluid, and no final decision has been made.

Commerce Secretary Howard Lutnick has also hinted that exceptions may be considered, saying adjustments to the tariff policy could be announced as early as Wednesday.

One reason for a temporary reprieve would be to allow automakers time to shift more investment and production to the US, a key demand from Trump.

President Trump has also suggested offering tax breaks to buyers of US-manufactured cars during his address to a joint session of Congress on Tuesday night.

Impact of Trump’s tariffs on the auto industry

Detroit’s Big Three automakers have strongly opposed the tariffs, cautioning that they could have major consequences.

They warned that auto prices could surge by thousands of dollars almost immediately, making vehicles less affordable for consumers.

The tariffs also pose a threat to supply chains, potentially causing severe disruptions that could impact production and delivery timelines.

Tariffs on Canada and Mexico could significantly raise US car prices, with costs climbing by as much as $12,000, according to a study by Anderson Economic Group.

The study estimated that building a crossover utility vehicle would become at least $4,000 more expensive.

For electric vehicles, the impact would be even greater, with costs potentially tripling.

Additionally, analysts have highlighted risks to profitability, suggesting that the tariffs could significantly erode or even wipe out earnings for US automakers.

Barclays analyst Dan Levy estimates that, without adjustments, the new tariffs could erase all profits for the Detroit automakers.

However, Levy sees a buying opportunity in the recent weakness, arguing that tariffs of this scale are unlikely to remain in place long-term.

“Given the potential for significant disruption ahead if the tariffs stick, we believe it’s a reminder as to why tariffs of this magnitude are unlikely to stick,” Levy wrote.

Many analysts believe that higher tariffs will ultimately be used as a negotiating tool rather than a permanent policy shift.

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