Happy Friday! Today’s edition unpacks how Trump’s auto tariffs are rapidly reshaping the industry, and how investors are positioning for potential winners and losers. First time reading? Join 190,000 self-directed investors gaining an edge every morning. Sign up here.
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Tesla’s favorable trade war
Whether you call it chaos or strategy, President Trump’s tariffs are redrawing the map of the auto industry in real time.
Investors are already picking a winner.
In the first trading session after Trump announced a 25% levy on imported cars and parts, Tesla stock ticked up while Ford, General Motors, Stellantis dropped.
Manufacturers like Adient and Lear fell too.
Elon Musk’s EV maker stands in contrast against its peers for a reason.
The company produces the cars it sells in the US at factories in California and Texas, with relatively little reliance on imported components. Its vertically-integrated model — once seen as a risk — is suddenly an advantage.
“Tesla is a relative beneficiary given 100% U.S. production footprint, substantial US sourcing and with Model Y competing in a midsize crossover segment where close to ~50% of vehicles could be subject to tariffs,” analysts at TD Cowen wrote in a note Thursday.
Legacy automakers, meanwhile, have long optimized for a globalized world.
Even those that do final assembly stateside lean heavily on overseas suppliers, exposing them to both direct tariffs and rising input costs.
Case in point, JPMorgan cut its price targets for Ford and GM this week, though it maintained its “Buy” ratings on both stocks.
The firm’s strategists expect GM to face $10.5 billion in additional costs due to tariffs, while Ford could tally up an initial bill of $2 billion.
Unless Trump adjusts course, strategists from various firms estimate that consumers could see prices on their favorite cars climb as high as $15,000.
For what it’s worth, Musk said in a post on X that Tesla will still face some tariff-related challenges, noting that the new policies will “affect the price of parts in Tesla cars that come from other countries.”
“The cost impact is not trivial,” Musk said.
But judging by Tesla’s stock price, investors don’t seem concerned.
In a protectionist world drawn by Trump, Wall Street is positioning for Tesla to win out.
And with rivals scrambling to rewire complex international supply chains, Musk’s made-in-America approach suddenly looks like a prescient trade war blueprint.
📈 The Fed’s preferred inflation gauge is due today. Economists polled by Dow Jones see the headline PCE index rising 0.3% in February month-over-month, and 2.5% year-over-year.
🚗 Tesla stock is climbing again. While shares of its rival automakers tumble on account of tariff news, Tesla moved 1.7% higher on Thursday to bring its market cap up $14.3 billion. (Bloomberg)
🏥 RFK Jr. plans 10,000 job cuts to the Health Department. The changes would reshape US health agencies and shutter regional offices. These layoffs will be in addition to roughly 10,000 other employees who chose to leave the department via voluntary separation offers. (WSJ)
📉 Small businesses are stalling out. Momentum from the pandemic recovery has slowed for most small business owners, a new report showed, and that could foreshadow sluggishness for the broader economy. For the latest survey, more owners reported their revenues decreased than increased for the first time since 2021. (Barron’s)
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Rapid-fire:
Lululemon forecasted annual revenue and profit below estimates and its stock dropped 8% after hours (Reuters)
Ferrari plans to raise prices up to 10% on some of its models in response to tariffs (WSJ)
Federal Reserve officials can’t stop saying the word “uncertainty” (Yahoo Finance)
The number of American billionaires in the world hit 870, outpacing the number from China the first time in 10 years (Barron’s)
ChatGPT’s viral image-generation AI is “melting” OpenAI’s servers, Sam Altman said (CNBC)
Robinhood is taking on Wall Street with a slate of new features including banking (Pomp Letter)
US automaker stocks have taken a beating from Trump’s tariff announcement (Opening Bell Daily)
AI tools now offer a tempting shortcut to everything, but that doesn’t mean you should always take it (Blog)
Last thing:
RenMac: Renaissance Macro Research @RenMacLLC
Expectation for higher vs lower stock prices lowest since 2010. When people anticipate something they tend to prepare by acting accordingly, hence this is a contrarian indicator supported by our policy uncertainty and other sentiment surveys. $SPY #betabull
3:37 PM • Mar 27, 2025
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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.
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