After several months of negotiations, the U.S. tariffs on foreign vehicles are now in effect. While the industry raises concerns, what should we really expect from Trump’s announcements?
The global industry in the crosshairs
Starting Thursday, April 3, the Trump administration implemented a new 25% tariff on all vehicles manufactured outside the United States. The goal, according to the President, is to rebalance the U.S. trade deficit and encourage manufacturers to set up their factories in the land of Uncle Sam. This measure is expected to generate the equivalent of 700 billion euros.
Canada, Japan, and Mexico are bearing the brunt of these tariffs. The situation is being closely monitored in Europe, especially in Germany, due to the import of popular brands among Americans. BMW, Mercedes-Benz, and Porsche, which sell heavily in the U.S., are particularly affected. Similar tariffs will also be applied to imported spare parts starting May 3.
American manufacturers also in Donald Trump’s crosshairs
American brands will also be heavily impacted by these tariffs. Indeed, production chains are mainly located in Canada and Mexico. The latter exports more than 70% of its production to the United States. Mexico manufactures several popular models, such as the Chevrolet Silverado, Toyota RAV4, and the BMW 3 Series sedan
The Mexican economy is highly dependent on the automotive sector, which generates 43 billion euros annually and 3 million direct and indirect jobs.
What does the future hold for the automotive industry?
The brands fear a significant increase in tariffs on their vehicles. They remain concerned about the impact on demand, which could create international tensions. In a statement, the trade association of American manufacturers, along with Ford, Stellantis, and General Motors, declared: “It is crucial that tariffs do not drive up prices for consumers.
This 25% tariff is another blow for manufacturers producing outside the United States. Since mid-March, they have also been subject to 25% tariffs on steel and aluminum.
The coming months will be crucial for the American automotive industry, determining whether Trump intends to reverse his decisions.
