President Trump’s executive order on Wednesday hitting foreign-built autos with a 25% import tax is sending shockwaves throughout the auto industry as OEMs brace for higher manufacturing costs, supply chain disruptions, and pinched profit margins.

To “motivate” U.S. automakers to move production back to the U.S., the government will now tax all vehicles that are made overseas (not just in Mexico and Canada as originally proposed).

As automakers grapple with the financial fallout—dragging their shares lower in Thursday’s trading—auto parts suppliers have largely avoided the market’s sharp downturn, thanks to a carve-out that temporarily shields the sector.

The executive order invoking Section 232 of the Trade Expansion Act of 1962 allows for USMCA-compliant auto parts to be exempt from the 25% tariff until a system can be put in place to “reliably” determine the value of U.S.-sourced auto parts. This carve-out, however, excludes key automobile parts defined as engines, transmissions, powertrain parts, and electrical components that are assembled overseas.

“This appears perhaps to be the greatest reprieve of all, particularly for Ford, which we previously estimated would face a $4B bill for parts imported from Canada and Mexico vs just $2B for finished vehicles,” J.P. Morgan’s Ryan Brinkman says.  

Additionally, OEMs can deduct the value of U.S.-sourced auto parts from the value of the non-domestically assembled finished product.

This distinction briefly served as a buffer to auto parts suppliers to the broad-based selling pressure on the auto industry, driving the auto parts sector into the green during premarket trading. But as most key components to the COGS (and the most expensive parts of the vehicle) are still in the crosshairs of the president’s executive order, and the exemption on auto parts is only temporary, the category is losing traction in sympathy with OEMs.

While there is no avoiding the pain, Brinkman says, given the inevitable demand destruction, some names within the category will face stronger headwinds resulting from the tariffs.

“The impacts are so potentially negative that we struggle to see how such measures can truly remain a permanent feature of the U.S. automotive landscape,” says Morgan Stanley’s Adam Jonas.

So, who benefits from higher prices for new cars? Those that are in the business to keep the old ones running.

Jonas describes the impact of auto tariffs as the unavoidable “Cubanization” of the U.S. auto fleet. As a result, retailers like AutoZone (NYSE:AZO), O’Reilly Automotive (ORLY), and Advance Auto Parts (AAP) saw gains of 4% to 6% on Thursday morning.

Related tickers: Borg Warner (BWA), Aptiv (APTV), Autoliv (ALV), Lear Corporation (LEA), Dana Incorporated (DAN), Gentex Corp (GNTX), Magna International (MGA), Genuine Parts (GPC), Visteon Corp (VC).