U.S. President Donald Trump announced on Wednesday that a 25% tariff on imported vehicles will take effect next week. This move follows weeks of threats aimed at protecting domestic car production and reducing trade imbalances.
Impact on the U.S. Auto Market
Nearly half of all cars sold in the U.S. last year were imports, making the new tariffs a significant challenge for both automakers and consumers.
Automakers Most Affected (Percentage of Cars Sold in the U.S. That Are Imported):
- Jaguar Land Rover (Tata) – 100%
- Geely (Volvo) – 90%
- Mazda – 81%
- Volkswagen – 80%
- Hyundai/Kia – 65%
- Mercedes-Benz – 63%
- BMW – 52%
- Toyota – 51%
- GM – 46%
- Stellantis – 45%
- Subaru – 45%
- Honda – 35%
- Ford – 21%
- Tesla – 0% (fully domestic production)
Top Vehicle Exporting Countries to the U.S.
In 2024, the U.S. imported $474 billion worth of automotive products, including $220 billion in passenger cars. The biggest exporters to the U.S. were:
- Mexico – 2.5 million vehicles
- South Korea – 1.4 million vehicles
- Japan – 1.3 million vehicles
- Canada – 1.1 million vehicles
- Germany – 430,000 vehicles
- UK – 90,000 vehicles
Global Trade Implications
The tariff is expected to strain U.S. trade relations with key allies like Mexico, Japan, South Korea, Canada, and Germany, all of which heavily rely on the American market. Automakers may need to adjust pricing, production locations, or supply chains to mitigate the impact.
Industry experts warn that higher car prices and potential retaliatory tariffs could disrupt the global auto industry, affecting both consumers and manufacturers.