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Trump's new auto tariffs are expected to impact the global automotive industry significantly, but Tesla may be less affected due to its domestic production and supply chain. While Tesla's stock has seen a decline of over 40% since December, analysts predict it will report around 398,000 vehicle deliveries for Q1. However, challenges persist in Europe and Canada, where political sentiment and reduced incentives threaten Tesla's competitive position.
Trump's new auto tariffs are expected to disrupt the global automotive industry, raising vehicle costs in the U.S. and affecting automakers' earnings. However, Tesla may be less impacted due to its domestic production, with shares rising despite a broader market decline. Musk acknowledged that while some parts will be affected, the overall cost impact is significant.
UBS analysts warn that the U.S. auto sector faces significant challenges due to new 25% tariffs on imported cars and parts, impacting automakers and suppliers like Gentex Corporation, which is trading near 52-week lows despite strong financial health. Tesla and Rivian may be better positioned as their production is U.S.-based, while General Motors might consider relocating production to avoid tariffs, though this would require substantial investment. Gentex reported a record annual revenue of $2.31 billion for 2024, despite missing quarterly earnings expectations, and anticipates revenue guidance of $2.4 to $2.45 billion for 2025.
Barclays has lowered its 2025 S&P 500 target to 5,900, a reduction of over 10% from its previous estimate of 6,600, due to concerns over U.S. tariff actions impacting economic growth. The bank anticipates S&P 500 earnings per share will drop to $262 from $271, citing potential earnings reductions from tariffs on imports, particularly from China, steel, and aluminum. Other financial institutions, including Goldman Sachs and RBC Capital Markets, have also revised their S&P 500 targets downward.
Elon Musk has warned that President Trump's newly announced 25% tariffs on imported vehicles will significantly impact Tesla due to its reliance on foreign-made parts. While Tesla assembles cars in the U.S., many components are sourced internationally, leading to increased costs. The tariffs, effective April 3, aim to protect American jobs but have raised concerns among key trading partners and could destabilize the global auto market.
Elon Musk has acknowledged that Tesla will face significant impacts from the newly announced 25% tariffs on cars and auto parts assembled outside the US, despite the company's vehicles being assembled domestically. Tesla sources over 20% of its parts from Mexico and an undisclosed amount from Canada, which will become more expensive due to these tariffs. The complex North American auto supply chain, previously simplified by trade agreements, is now at risk, potentially leading to increased vehicle prices and further complications for the automaker.
US consumer prices rose by 0.2% in February, with annual inflation at 2.8%, but uncertainty over tariffs and policy is dampening business sentiment and global growth forecasts. The S&P 500 and Nasdaq saw significant declines, while real estate sentiment also weakened. Despite challenges, infrastructure remains a strong investment due to its defensive nature and potential benefits from onshoring trends.
Nestlé S.A., the world's leading food group, reports its sales breakdown by product family: powdered and liquid beverages (26.9%), pet food (20.7%), pharmaceutical and nutrition products (16.6%), prepared dishes and seasonings (11.7%), dairy and ice creams (11.4%), chocolates and cookies (9.2%), and packaged waters (3.5%). Geographically, sales are concentrated in the United States and Canada (35.2%), followed by China (5.9%), Brazil (4.4%), and several European countries, with Switzerland at 1.2% and the UK at 4%.
UBS's analysis reveals that U.S. auto parts and technology stocks could face significant profit losses under various tariff scenarios with Mexico and Canada, particularly if companies fail to adjust prices or reduce volumes. Gentex Corporation, despite recent earnings misses, remains well-positioned with strong financials and a focus on growth, including a forecasted revenue increase for 2025 and a strategic acquisition of VOXX International Corporation. The analysis underscores the critical need for companies to manage increased costs effectively in a challenging market environment.
Scotiabank has appointed Pablo Elek, previously a top executive at HSBC's Mexico unit, as CEO of its Mexican operations, effective May 15. This move aligns with the bank's strategy to focus on North America, as it shifts capital away from Latin America, including the transfer of operations in Colombia, Costa Rica, and Panama to Banco Davivienda. CEO Scott Thomson noted that while the bank is cautious about U.S. tariffs, it remains committed to its North American corridor strategy.
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Tesla less impacted by Trump auto tariffs amid global industry turmoil
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