Al Root
Huge import tariffs? No problem.
Chinese electric-vehicle stocks were surging early Monday despite the Biden administration's plan, reported by The Wall Street Journal, to hike tariffs on the cars to 100% from 25%.
NIO shares were up 4.9% in early trading, while the S&P 500 and Nasdaq Composite were both up 0.1%. XPeng shares gained 2.5%. Li Auto stock was up 2.2%.
The biggest reason the stocks haven't been hurt by the tariffs is that none of those auto makers sell cars in the U.S. and aren't likely to soon. The existing 25% tariff is enough to wipe out any potential profits.
The Chinese EV makers have been shipping cars to Europe and Southeast Asia instead.
Another reason for the gains is Zeekr, a Chinese EV maker that sold American depositary receipts, listed on the New York Stock Exchange, to the public on Friday. The ADRs leapt 35% on Friday and were up 9.1% early Monday. That gives the EV maker a market value of about $7.6 billion.
When one stock in a sector goes up, it can drag others higher as well.
A third reason is the market, which is always forward-looking. Shares of most EV makers dipped Friday when the potential for higher tariffs was reported. NIO stock dropped 4.9%. XPeng and Li shares fell 5.3% and 2.2%, respectively.
Those moves are likely to be bigger than whatever could come when Biden unveils the tariffs. The announcement could come on Tuesday, according to The Wall Street Journal.
Write to Al Root at allen.root@dowjones.com
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May 13, 2024 10:53 ET (14:53 GMT)
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