The automobile producer of Detroit automobile producers falls based on Trump's tariff announcement
The border wall is shown in the background when a half key that carries toyota trucks crosses a bridge after they were deleted to the USA on March 4, 2025 from Mexico along the border in San Diego, California.
Mike Blake | Reuters
Car shares digested President Donald Trump's announcement that he would use 25% tariffs for “all cars that are not made in the USA” as well as certain automotive parts.
The management of Trump had telegraphed plans for the tariffs in the auto industry, but the effects of these movements and the assertiveness mechanism take shape. The president's executive order said that the tariffs would come into force on April 3 and for auto parts by May 3.
The shares of the “Detroit Three” all fell. General Motors The stock decreased by more than 6% after trading on Thursday afternoon Sternantis And Ford engine The shares were about 1% or more than 3%. Shares of TeslaHowever, more than 2% were higher.
“In our reporting, for [original equipment manufacturers]Tesla and Ford seem to be the most shielded location of vehicle assembly systems, although Ford is exposed to incremental exposure to imported engines.
Trump said on Wednesday that he would not put a tariff on vehicles that were built in the United States
The tariffs apply to imported passenger vehicles and light trucks as well as important auto parts, including engines and transmissions, the White House announced in a fact sheet.
Some aspects of the tariffs are still being worked out. Auto parts that correspond to the US Mexico-Canada Agreement remain zariff-free until the trade secretary can consult the US customs and border protection in order to find out how tariffs can be applied to non-US content.
The United Auto Workers Union celebrated Trump's announcement.
“These tariffs are an important step in the right direction for AutoWorkers and working communities across the country, and now the car manufacturers are, from the big three to Volkswagen and beyond, to bring good union jobs back to the USA,” said UAW President Shawn in a statement on Wednesday.
Former Missouri Governor Matt Blunt, President of the American Automotive Policy Council, who represents Ford, GM and Stellantis, said in an explanation that the AAPC “the vision of President Trump, increasing automotive production and jobs in the USA, and will continue to work with the administration about permanent guidelines that will help the Americans.
Nevertheless, Blunt warned that tariffs should be implemented in a way “that increasing the prices for consumers is avoided and the competitiveness of the integrated North American automotive sector is preserved”.
Vehicles consist of tens of thousands of parts, many of which pass back and forth across the US border before an end product is completed.
Data and forecast company S&P Global Mobility According to reports, there are an average of 20,000 parts in a vehicle if it is torn down and down on its nuts and screws. Parts can arise between 50 and 120 countries.
The company also reports that 25 car manufacturers produce an average of 63,900 light vehicles in North America per day. Much of them, around 65%, is gathered in the USA, followed by 27% in Mexico and 8% in Canada.
Goldman Sachs analysts wrote on Thursday that Trump's 25% tariff could increase the price of imported cars by 5,000 to 15,000 US dollars. If around 50% of the parts come from foreign sources in a car produced in the USA, the tariff could increase the price of these cars by $ 3,000 to $ 8,000.
President Trump had previously granted the car manufacturers a one-month exemption from tariffs for vehicles that correspond to the trade rules of the United States Mexico-Canada agreements.
– Michael Wayland and Michael Bloom from CNBC contributed to this report.
Comments are closed.