Trump's tariffs are devastating for the entire Auto industry

The decision made by Donald Trump on March 26, 2025, to impose a 25% tariff on any car not produced in the USA is a "fatal signal" for the automotive industry. There will be at least a response from Japan.

Increasingly closing off its economy, Donald Trump this time decided to penalize the automotive industry with a 25% tariff on any car not produced in the United States starting April 2. We can obviously expect similar measures from the countries affected by the taxation, particularly Japan, South Korea, and European countries hosting car manufacturers. But there are also doubts among American manufacturers. Their fear is a general increase in prices across all markets, including the USA.

Even More Expensive

Ford, Stellantis, and General Motors have issued a statement about their fear of losing competitiveness on the North American continent, including Canada and Mexico. Elon Musk also expressed his concern about Tesla prices rising due to imported parts. However, it's mainly among European, Korean, and Japanese manufacturers that the discomfort is most palpable. The reaction of markets in Asia shows a fear of decreased sales in the USA, a crucial market for many Asian brands. Japanese Prime Minister Shigeru Ishiba plans to implement retaliatory measures. As far as German manufacturers are concerned, their VDA federation speaks of a "fatal signal for free trade". The decision made by Donald Trump will affect the entire global supply chain, which risks slowing growth and impacting "the prosperity of citizens", according to the VDA.

(MH with Olivier Duquesne – Sources: RFI & Le Soir with AFP – Picture: © BMW)