A resolution of global trade tensions would help, but not fix, a decline in the auto industry, one automotive analyst told CNBC on Tuesday.

Trade resolution "does work to sort of de-risk an industry that we already see is in a little bit of cyclical decline," James Albertine, senior automotive analyst and managing partner at Consumer Edge Research, said on CNBC's "Power Lunch." "At the end of the day, this is about managing through sort of the imposed risk as it relates to ongoing trade disputes."

Shares of big U.S. automakers, including General Motors and Ford, climbed Monday after President Donald Trump announced the U.S. and Mexico have reached a preliminary deal to update the 25-year-old North American Free Trade Agreement. The deal's provisions allow for import tariffs on cars and trucks that do not get at least 75 percent of their content from North America or use a higher proportion of labor that makes at least $16 an hour.

Both foreign and domestic automakers have invested heavily in vehicle assembly and third-party parts suppliers in Mexico. As transferring those operations would incur heavy costs, any progress toward securing manufacturing in Mexico would be a win for the auto industry, Albertine said.

"Even if there are some offsetting additional costs going forward making the production a little bit more expensive than anticipated, it's a lot more modest than if they would have had to transfer [manufacturing] to a different country," he added.

But the auto industry is suffering from much more than just the uncertainty around trade.

In a note published on Tuesday, Consumer Edge Research underscored several key factors contributing to auto industry decline. Emissions standards, gradual diesel phase-out, higher commodity prices, rising interest rates and waning consumer demand are all making "this one of the most difficult operating environments for [original equipment manufacturers] in recent years," the note said.

"To see some resolution is clearly a positive, but we are a long way from sort of overall resolution," Albertine said.

Consumer Edge Research set a target price of $45 per share for GM, and $12 per share for Ford. GM closed the day down 0.98 percent at $37.32 per share. Ford was last up slightly at $10.01 per share.

— CNBC's Brenda Hentschel contributed to this report.