In recent years, it has become increasingly difficult to keep track of the tariffs imposed by the Trump administration—some are introduced, others lifted, and they span almost the entire globe. One of the most significant moves was a 25% tariff on automobile products, including both foreign-assembled cars and auto parts, in addition to a general 10% tariff on other imported goods. These were accompanied by "reciprocal" tariffs without clear rules and even higher tariffs on Chinese imports.
As a result, major uncertainty has emerged, particularly in the automotive industry, which is global by nature and relies on complex, multi-continent supply chains. Both foreign and American manufacturers are affected, regardless of where the vehicles are assembled.
Honda decided to move production of its popular CR-V model from Canada to the U.S., which can be seen as a success for Trump’s tariff strategy. However, a planned $11 billion investment in electric vehicle expansion in Ontario was halted.
On May 8, Trump announced a preliminary trade agreement with the UK, under which British automakers would be subject to only a 10% tariff—significantly lower than the 25% tariff faced by American and other foreign producers. This exemption applies to up to 100,000 British vehicles per year, matching the UK’s annual exports to the U.S.
As a result, high-end British cars now face lower tariffs than American-made or Mexican/Canadian-imported vehicles that contain far more U.S.-made components. This disparity has frustrated American manufacturers, as it could lead to higher prices for the average U.S. consumer, while luxury cars like Rolls-Royce remain relatively unaffected.
Ford has already announced price increases on three models assembled in Mexico: the Bronco Sport, Maverick, and Mustang Mach-E. While the full 25% tariff hasn't yet been applied, customers will still see a noticeable rise in prices.
Volvo announced it would lay off 125 workers at its South Carolina factory, citing a negative business outlook and direct impact from tariffs.
General Motors has increased pickup truck production within the U.S. to avoid relying on imported parts and evade additional costs.
Jaguar Land Rover temporarily suspended exports to the U.S. in April while reviewing the tariff situation.
The Trump administration suspended some tariffs and implemented a general 10% duty for most countries, valid for 90 days.
Still, the 25% tariff on cars and parts remains in place.
China is excluded from tariff relief—on the contrary, its tariffs rose to as high as 125%, especially impacting the price of spare parts. This not only raises the cost of new cars but also drives up repair expenses for older vehicles.
Canada and Mexico are exempt from the general tariff, though specific industries may still face individual tariffs. Under the USMCA agreement, some American-made parts are exempt, but price hikes remain likely.
Additionally, U.S. customs now imposes tariffs on imported cars over 25 years old, even though such vehicles are exempt from safety and environmental regulations.
In response, Ford launched a nationwide campaign titled “Employee Pricing for Everyone,” offering internal discounts to all customers regardless of their employment status. The slogan:
“You Pay What We Pay – Ford. From America. For America.”
Stellantis quickly followed with its own discount initiatives to reduce inventory and boost sales before tariffs fully impact the market.
According to experts, economists, and automakers, the tariffs are expected to lead to:
However, in the short term, consumers might benefit from temporary discounts—until the new tariffs are fully reflected in market prices.
