Coalition for a Prosperous America chief economist Jeff Ferry discusses the panic over President Donald Trump’s tariffs on ‘Making Money.’
President Trump’s tariffs on automobiles and automobile parts are going to hit some automakers harder than others, particularly among those with a lower share of their U.S.-sold vehicles assembled outside the United States.
For instance, Volvo, Mazda, Volkswagen and Hyundai Motor, which include the brands Genesis and Kia, imported at least 60% of their respective U.S. sales in 2024, according to S&P Global Mobility.
Comparatively, Ford, Honda, Stellantis and General Motors have the most cars made in the United States, the S&P Global Mobility report showed.
Trump, who views tariffs as a way to bring in tax revenue to finance his plans for tax cuts while spurring a revitalization of domestic manufacturing, announced on Wednesday plans to impose a 25% tariff on all imported autos.
He indicated that those tariffs, up from the 2.5% previously announced, would take effect on April 2, when he expects to announce his reciprocal tariff plans.
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The Trump administration said Thursday that the president’s move to implement such tariffs “will protect and strengthen the U.S. automotive sector.” The administration argued that foreign automobile industries have expanded due to “unfair subsidies and aggressive industrial policies” while “U.S. production has stagnated.”
Ford signage at a dealership in Richmond, California, US, on Friday, June 21, 2024. (David Paul Morris/Bloomberg via Getty Images / Getty Images)
However, while “some contend that tariffs on the auto industry may boost US manufacturing, only GM, Ford and Stellantis have excess capacity to increase US production, and automakers are not likely to be able to make such a change quickly or cost-effectively,” according to the March S&P Global Mobility report. “A production shift would also require suppliers to relocate.”
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Car experts have argued that tariffs will exacerbate affordability issues, especially since no vehicles are built or assembled with 100% domestically made parts, according to the National Automobile Dealers Association.
When it comes to car prices, a variety of market forces,aside from tariffs, will determine how much a car’s price will fluctuate, according to Autotrader’s executive editor Brian Moody.
Used vehicles for sale at a dealership in Colma, California, US, on Tuesday, Feb. 21, 2023. (Photographer: David Paul Morris/Bloomberg via Getty Images / Getty Images)
Additionally, it could depend on how many models are made in the U.S. compared to other countries. If a manufacturer makes one model in the U.S., and others outside, they may raise the prices equally to absorb the tariffs without having a large hit on one particular model, according to Moody. This means that automakers could spread the increase out over several models, Moody said.
Here is a breakdown of the share of automakers with the percentage of sales imported
S&P Global data on percentage of US sales imported (S&P Global Mobility)
