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Good morning! The tariff president is back in action and this time he’s targeting automakers — we’ve got what to know below. First time reading? Join 190,000 self-directed investors gaining an edge every morning. Sign up here. 

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Car stock crash

The auto industry has been bracing for impact from President Trump’s trade war — just not this hard, this soon.

Late Wednesday, the commander-in-chief announced 25% tariffs to begin April 2 on “all cars that are not made in the United States,” while vehicles built inside the country will face “absolutely no tariff.”

No exemptions for Canada. No leniency for Mexico. Full speed ahead, precisely as President Trump has signaled for months. 

Shares of Ford, General Motors, Stellantis and Ferrari dropped after hours. Meanwhile, Tesla — which makes the cars it sells in the US domestically — saw its stock climb.

Wall Street’s immediate negative reaction, illustrated by the stock declines for most automakers, suggests investors had priced in a less aggressive tariff agenda. 

Some analysts estimate that tariffs, if they remain in place, could add $75 billion a year to automaker costs. The fear for everyday Americans, naturally, is that consumers end up footing the bill. 

“In our view these initial tariffs (if they hold in their current form) would be a hurricane-like headwind to foreign (and many US) automakers and ultimately push the average price of cars up $5k to $10k depending on the make/model/price point,” said Wedbush analyst Dan Ives.

President Trump claims the move will bring more auto and manufacturing jobs to America.

That’s certainly plausible in the long run, but that doesn’t mitigate the immediate panic of scrambled supply chains and price hikes on popular vehicles like the Chevy Silverado, Toyota Tacoma, and Dodge Ram — all of which are produced in Mexico.  

Even cars that are assembled in the US could succumb to tariffs, given that many rely on imported parts. 

For now, Tesla, which has factories in California and Texas, appears most insulated from the tariffs. 

Many of the details are still murky. It’s possible the White House softens or nixes the tariffs before the April 2 deadline.

That said, the announcement nonetheless serves as a hardline wake-up call for an industry that’s made a habit of scaling efficiencies across borders. 

“We continue to believe this is some form of negotiation and these tariffs could change by the week,” Ives said, “although this initial 25% tariff on autos from outside the US is almost an untenable head scratching number for the US consumer.”

Market snapshot:

Elsewhere:

📈 The S&P 500 reclaimed its 200-day moving average. Until a couple weeks ago, the index had traded above that level for 336 straight sessions. Data dating back to 1946 from Sundial Capital shows that the S&P 500 tends to be weaker than average after a pattern like this. (Yahoo Finance)

💵 Dollar Tree is selling its Family Dollar business. A consortium of private equity investors will acquire it for roughly $1 billion as the parent company attempts to steer the discount retailer back on track. Dollar Tree shares are down about 10% this year, giving it a market value of about $14.9 billion. (WSJ)

📉 The US could risk default as soon as May. That’s according to a report from the Congressional Budget Office. The team does not have that as its base case, however, and it expects lawmakers to meet its debt obligations until August. (Barron’s)

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Rapid-fire:

• OpenAI is close to finalizing its $40 billion SoftBank-led funding round (Bloomberg)

• GameStop is raising $1.3 billion via convertible debt to buy bitcoin (CoinDesk)

• Copper prices surged to all-time highs Wednesday (Bloomberg)

• ChatGPT’s new viral image generator has suddenly made beautiful work feel generic (Blog)

• The Atlantic published the full military-related Signal messages after Trump said the texts are not classified (CNBC)

• Millions of student borrowers are at risk of credit-score declines (WSJ)

• Three of the top 10 hottest US housing markets are based in New York (ResiClub)

Last thing:

About me:

📰 I’m Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.

I write our flagship newsletter to prepare you for each trading day, unpacking markets, economic data and Wall Street with analysis you won’t find anywhere else. Feedback? Reply directly to this email, ping me on X @philrosenn, or write me [email protected].