Thu, 27 Mar 2025

Thu, 27 Mar 2025 How will carmakers be affected by Trump's tariffs?

Investors sold off shares of carmakers in Japan, Germany and the UK, but US brands are also set to be hit.

* US President Donald Trump's announcement of a 25% import tax on foreign cars and car parts has sent shockwaves through the global automotive industry.
* Investors have sold off shares in major automakers such as Toyota, BMW, and Jaguar Land Rover, wiping billions of dollars off their value.
* Tesla, which is heavily reliant on imported parts, was initially spared from the hit but its CEO Elon Musk warned that it would not be immune to the tariff disruption.
* No vehicle is 100% US-made, according to a study by Cars.com, and the tariffs could push up prices by $4,000 to $12,000 per vehicle.
* The tariffs could affect around $300-400 billion in imports, or almost 10% of everything the US brings into the country each year.
* Many major car companies have operations in the US but also bring in models and parts from outside the US.
* Some firms may be able to redirect work to factories in the US, but this could lead to higher prices and lower production in key trading partners.
* The tariffs are likely to have a significant impact on carmakers exporting from Germany and the UK, which sell fewer, more premium brands at higher prices.
* Ferrari has already announced a 10% price hike due to the new duty, and other companies may follow suit or even pull models out of the US entirely.
* Trump claims that the tariffs will boost America's manufacturing base, but economists fear they could spark a trade war.
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