Market Trends: G7 Summit, Fed Decision, Empire Earnings and More

This week's market highlights include the G7 summit in Kananaskis, Alta, where investors will monitor discussions on trade deals, tariff relief, and potential Russian sanctions. The US Federal Reserve, Bank of England, and Bank of Japan are expected to hold interest rates steady. Energy stocks have surged due to higher oil prices, and crude oil has reached a nearly six-month high. Canadian markets have seen a third consecutive weekly gain, while US markets suffered a weekly loss due to geopolitical tensions.

Washington — Industry trade groups representing automakers, dealers, and suppliers have united in a joint letter to top Trump administration officials, urging relief from impending tariffs on auto parts set to take effect next month. The letter, signed by six major lobbying groups, warns of significant disruptions to the global automotive supply chain, higher consumer prices, and potential job losses if the tariffs proceed.

The tariffs, scheduled to be implemented on May 3, will target over 100 categories of auto parts, ranging from engines to steering wheels and hinges. The letter, which includes representatives from the Alliance for Automotive Innovation, American Automotive Policy Council, Autos Drive America, Motor & Equipment Manufacturers Association, National Automobile Dealers Association, and American International Automobile Dealers Association, emphasizes the potential for supply chain failures and job losses that could mirror the impacts of the COVID-19 pandemic.

The letter highlights the potential for tariffs to increase costs for consumers, decrease sales at dealerships, and make vehicle servicing and repairs more expensive and unpredictable. The signatories point out that most auto suppliers are not adequately capitalized to handle an abrupt tariff-induced disruption, and many are already in distress. The failure of one supplier could lead to shutdowns in automakers' production lines, impacting all suppliers and resulting in job losses.

The industry letter acknowledges the goal of boosting domestic manufacturing but underscores the need for a more gradual approach to avoid immediate disruptions. The Center for Automotive Research in Ann Arbor estimates that the tariffs could cost U.S. automakers a total of $107.9 billion annually, affecting 6.8 million vehicles at General Motors, Ford, and Stellantis alone. Across the industry, this would increase to 17.7 million affected vehicles.

In Michigan, where the auto industry accounts for about 20% of economic activity, the potential impacts are significant. The letter emphasizes that while the industry supports increased manufacturing and supply chains in the United States, it is not feasible to reroute global supply chains overnight or even in months.

President Donald Trump has previously stated that tariffs on imported vehicles and auto parts would encourage auto businesses to rebuild their U.S. manufacturing presence. However, automakers and trade groups have consistently warned about the severe impacts of tariffs on their operations. The industry letter echoes these concerns, stating that the tariffs could lead to higher costs for consumers, lower vehicle sales, and reduced U.S. auto exports without creating new manufacturing jobs.

The letter was sent to Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and U.S. Trade Representative Jamieson Greer. Trump hinted last week that he might pull back on the auto parts levies, indicating that he is considering a delay to give companies time to switch to U.S.-made parts.

Auto industry observers have noted that the uncertainty surrounding tariffs has frozen future investment decisions. Carla Bailo, CEO of ECOS Consulting LLC and former president of the Center for Automotive Research, commented that the industry letter is a show of force aimed at achieving clarity on tariff policies. The USMCA offered certainty, but the current situation is described as "topsy turvy" due to the lack of clarity on what will be tariffed once the government has the processes in place to tax only non-U.S. content in vehicles and parts.

Executives from the Detroit Three automakers, including Ford Motor Co., General Motors Co., and Stellantis NV, have been instrumental in getting Trump to scale back Canada and Mexico tariffs in March. However, most auto businesses lack the individual connections or influence to independently reach top decision-makers. Membership in the trade groups gives a voice to smaller suppliers that cannot easily shift their foreign supply chains to avoid tariffs and produce their offerings in the United States.

The industry letter is available in full [here](https://www.detroitnews.com/story/business/autos/2025/04/22/auto-plead-tariff-relief-trump/83216755007/).

References:
[1] https://www.detroitnews.com/story/business/autos/2025/04/22/auto-plead-tariff-relief-trump/83216755007/
[2] https://www.marketbeat.com/instant-alerts/filing-procyon-advisors-llc-makes-new-585000-investment-in-hormel-foods-co-nysehrl-2025-06-09/