Recent Trade Deal Throws Curveball to Ford and GM

It's been quite the task keeping up with rapidly changing policy when it comes to incentives for electric vehicles and tariffs slapped on many products from many countries. Just as investors, analysts, and automakers were getting familiar with tariffs, things are being shaken up again with the administration's trade deal with Japan. The problem? This deal might not be good at all for General Motors (NYSE: GM) and Ford Motor Company (NYSE: F), while it benefits Japanese rivals. Let's dig in.As maybe only President Donald Trump would do, the announcement was made via social media: "We just completed a massive Deal with Japan, perhaps the largest Deal ever made," President Trump announced on Truth Social, according to Yahoo Finance. Trump added that Japan would pay a "reciprocal" tariff on imports of 15%, as well as invest $550 billion into the US "at my direction," Trump said, without further details. So, what does this mean, you ask? The 15% tariff rate will apply to cars and car parts, meaning that Japanese automakers will be able to import vehicles from Japan cheaper than U.S. automakers, such as Ford and General Motors, can import vehicles from Mexico or Canada at a 25% rate. While Canada's tariff rate was recently raised to 35% for Canadian imports, goods that comply with the United States-Mexico-Canada Agreement, including most vehicles and auto parts, are exempt. Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool