Trump Considers Auto Tariff Exemptions—Can S&P Ratings and Goldman Sachs’ Sales Forecasts Be Torn Up?

TradingKey - U.S. President Donald Trump’s ever-changing tariff policies are once again unsettling  Wall Street, as investors and analysts scramble to keep pace with the shifting contours of American trade policy.  In the latest development, Trump floated the idea of exempting imported vehicles and auto parts from tariffs—a move that comes amid growing concerns over the sector's financial outlook.

Speaking on Monday, April 14,  Trump said he is considering temporary exemptions on tariffs for imported vehicles and components, in a bid to assist U.S. automakers. As manufacturers increasingly source parts from Canada, Mexico, and other regions, Trump acknowledged the need to provide them with time to gradually shift production back to the United States.

Currently, the U.S.  imposes a 25% tariff on imported vehicles, with tariffs on auto parts scheduled to take effect after May. However, Trump offered no specifics on  which products might be exempted or how long exemptions would last, unlike the previous “90-day reciprocal tariff pause.”

Despite the lack of clarity, markets responded positively.  Shares of Ford Motor, General Motors, and Stellantis rebounded from intraday losses, closing up 4.07%, 3.46%, and 5.64%, respectively. Japanese automakers also rallied in early trading on Tuesday, April 15, with Toyota Motor, Honda Motor, and Mazda rising more than 5%, while Mitsubishi Motors gained over 4%. Both the Nikkei 225 Index and TOPIX advanced more than 1%.

Trump’s remarks followed a warning from ratings agency S&P Global, which cautioned that proposed tariffs could jeopardize credit ratings across the auto sector. In a report released just hours earlier, S&P said that companies such as Ford, General Motors, and over a dozen auto parts suppliers could face a heightened risk of downgrades if the tariffs are enacted.

S&P noted that the proposed tariffs could significantly erode profitability and cash flow for automakers—challenges that may not be easily mitigated. For now,  the agency maintains investment-grade ratings for Ford and GM at BBB- and BBB, respectively, but flagged that these assessments remain highly uncertain given the fluid nature of the administration’s trade policy.

Adding to the pressure, Goldman Sachs last Thursday slashed its auto sales forecast from 16.25 million to 15.4 million vehicles. The bank also trimmed its 2026 projection by 1.1 million units to 15.25 million, citing expected cost increases from tariffs that could amount to several thousand dollars per vehicle.

Goldman Sachs warned that automakers would struggle to pass these added costs on to consumers,  particularly in a sluggish demand environment.