President Donald Trump is once again back with his tariff hammer, and this time, the auto industry is feeling the squeeze. Last week, Trump announced a sweeping 25% tariff on “all cars that are not made in the United States,” along with certain automobile parts. According to his executive order, the tariffs will hit vehicles on April 3 and auto parts by May 3. And, of course, the market didn’t take kindly to the news, sending shares of several automakers like General Motors (GM) and Ford (F) into a nosedive.
Having said that, luxury powerhouse Ferrari (RACE) is also among the many automakers in the danger zone thanks to its exclusive Maranello, Italy manufacturing, making it fully exposed to Trump’s aggressive tariffs. Yet, interestingly, investment firm Bernstein seems to believe the luxury car maker is built to power through the storm even as the broader industry faces headwinds. So, let’s take a closer look at what's driving this bold vote of confidence.
