(NEW YORK) — U.S. stocks ticked higher on Thursday in the first trading since President Donald Trump announced 25% auto tariffs.
The tariffs have escalated a global trade war and prompted forecasts of higher car prices.
The Dow Jones Industrial Average climbed 20 points, or 0.05%, while the S&P 500 increased 0.25% on Thursday morning. The tech-heavy Nasdaq jumped 0.25%.
Shares of major U.S. automakers dropped in early trading. General Motors dropped more than 6%, while Ford fell nearly 2%. Stellantis — the parent company of Jeep and Chrysler — declined 1%.
Tesla, the electric carmaker led by Trump-advisor Elon Musk, bucked the trend. Shares of Tesla climbed 5.5% in early trading on Thursday.
The 25% tariffs will be applied to imported passenger vehicles, including cars, SUVs, minivans, cargo vans and light trucks, according to a White House fact sheet released after Trump’s Oval Office remarks on Wednesday. The tariffs will take effect on April 3.
The tariffs will also be applied to key imported auto parts, including engines, powertrain parts and electrical components.
The auto tariffs are set to target a sector that employs more than a million U.S. workers and relies on a supply chain intricately intertwined with Mexico and Canada. Tariffs placed on the auto industry risk raising car prices for U.S. consumers, experts previously told ABC News.
Ferrari may raise U.S. prices as much as 10% in response to the tariffs, the company said in a statement on Thursday. Dan Ives, a managing director of equity research at the investment firm Wedbush, predicted general tariff-related price increases of between $5,000 and $10,000 per vehicle.
Canadian Prime Minister Mark Carney on Wednesday called the measure “a direct attack on our workers.” The Canadian government plans to review its trade options, Carney said.
European Commission President Ursula von der Leyen on Wednesday expressed “regret” about the decision to impose auto tariffs. “We will now assess this announcement, together with other measures the US is envisaging in the next days,” von der Leyen said in a statement.
Early Thursday morning, Trump warned of retaliatory tariffs if officials in Canada and Europe move forward with countermeasures.
“If the European Union works with Canada in order to do economic harm to the USA, large scale Tariffs, far larger than currently planned, will be placed on them both in order to protect the best friend that each of those two countries has ever had!” Trump said in a post on Truth Social.
This is a developing story. Please check back for updates.
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