Traders debate which automakers can overcome Trump's potential border tax
The "Fast Money" traders debated Thursday what is the best play in the auto space, amid tweets from Donald Trump threatening to impose an import tariff to prevent jobs moving to Mexico and other low-cost countries.
Earlier on Thursday, Trump rebuked Toyota Motor on Twitter after the Japanese automaker said it had no plans to curb production in Mexico. Toyota shares ticked lower after the tweet, hitting a session low of $120.32. The stock ended the session slightly above that level at $120.44.
The president-elect has previously threatened General Motors with a border tax, something he argues will encourage companies to keep production in the United States, creating more jobs for Americans. Opponents argue that an import tariff could lead to skyrocketing costs for the American consumer.
Trader Tim Seymour said the relatively tempered move in Toyota Motor was "rational" for the market.
If investors are looking for something in to auto sector, trader Pete Najarian said to look at Goodyear Tire. He said the company benefits from consumer trends favoring vehicles with larger tires.
Trader Dan Nathan said that one potential headwind for California-based Tesla Motors is the pressure to meet demand for its low-cost Model 3. He said he's not sure if the company can produce the car, meet its delivery targets and keep the $35,000 price tag.
Disclosures:
KAREN FINERMAN
Karen Finerman is long AAL, BAC, BAC short calls, C, DAL, FB, FL, GLMP,, GOGO, GOOG, GOOGL, JPM, LYV, KORS, KORS calls, KORS puts, M, MA, SEDG, SPY puts, TACO, UAL, URI, WIFI long call spreads. Her firm is long ANTM, AAPL, BAC, C, C calls, FB, GOOG, GOOGL, JPM, JPM calls, KORS, LYV, M, MOH, PLCE, SPY puts, URI, WIFI. Her firm is short IWM, MDY. Finerman is on the board of GrafTech International.
PETE NAJARIAN
Pete Najarian owns calls: AKS, BLL, BVN, BZH, CCL, CNX, DVN, ETP, GDX, GILD, HA, HRL, KORS, INTC, JBLU,KKMB, LVS, MT, NEM, P, RIO, TLT, TV, UUP, XLF, WFT, WLC. He is long stock: AAPL, BAC, BLL, DIS, DISCA, GE, GILD, HD, INTC, JWN, KMI, KMIA, KO,KORS, LVS, MRK, MSFT, PEP, PFE, WYNN, XLNX. Najarian has puts: GGP, PJC, X.
DAN NATHAN
Dan Nathan is long XHB Jan put spread, XLK Jan Put spread, XRT Jan put spread, MCD Feb puts, XLI Feb put spread, FXI Feb put spread.
TIM SEYMOUR
Tim Seymour is long ABX, APC, AVP, BAC, BBRY, C, CLF, CVX, DO, DVYE, EDC, EWN, EWZ, F, FB, FCX, FXI, GM, GOOGL, GE, INTC, LQD,MCD, MUR, OIH, PG, RACE, RAI, RH, RL, SINA, SQ,T, TWTR, VALE, VZ, XOM, short: EEM, SPY, XRT. Her firm is long ABX, BABA, BIDU, CBD, CLF, EEM, EWZ, F, KO, MCD, MPEL, NKE, PEP, PF, TCEHY, SAVE, SBUX, SINA, VALE, VIAB, WMT, WEN, X, YHOO, short EWG, HYG, IWM.