President Donald Trump’s 25% tariff on all cars imported to the United States has sent ripples through the global automotive industry. Officially implemented on April 3, this policy is already reshaping manufacturing decisions and trade strategies. Everything seems to be in flux as automakers reevaluate their approach to the U.S. market. Some are shifting production domestically, while others plan to adjust vehicle pricing. For consumers, these tariffs could result in cost hikes of several thousand dollars per vehicle.
The response is constantly changing as it becomes increasingly clear these tariffs are here to stay. Keep up with all the latest news surrounding the auto industry and tariffs with our updated Digital Dealer Tariff Tracker.
Auto Parts Tariffs Are Officially in Effect | May 5
President Trump has implemented a 25% tariff on foreign-made auto parts, including powertrain components, seats, and airbags, while introducing some key exemptions to reduce the strain on automakers. One significant adjustment is “destacking,” which prevents overlapping tariffs by ensuring companies only pay the highest applicable duty. Additionally, parts compliant with the United States-Mexico-Canada Agreement (USMCA) are exempt, and retroactive reimbursement is available for already paid tariffs. Automakers will also receive temporary reimbursements on tariffs for parts, calculated as a 3.75 percent of a vehicle’s value, to give them time to adjust their supply chains.
Despite these measures, the tariffs remain a substantial financial burden. General Motors anticipates a $4–$5 billion hit to its earnings, while Stellantis has pulled its profit guidance due to tariff uncertainties. Ford, while acknowledging the relief measures, continues to stress the industry’s challenges. These policies aim to promote domestic manufacturing, but automakers face significant short-term hurdles as they transition production back to the US.
Source: Yahoo Finance
Trump Provides Automakers with Tariff Relief | April 29
President Donald Trump signed executive orders Tuesday to provide some relief from his 25% tariffs on autos and auto parts. The relief includes a temporary 15 percent rebate for automakers assembling vehicles domestically, aimed at encouraging production shifts to the U.S. and creating jobs. The rebate would be available for one year and then drop to 10 percent the second year. The order also prevents the “stacking” of tariffs, car companies already paying auto tariffs won’t also have to pay other tariffs on aluminum, steel and other imports.
“President Trump has had meetings with both domestic and foreign auto producers, and he’s committed to bringing back auto production to the U.S.,” Treasury Secretary Scott Bessent said. “So we want to give the automakers a path to do that, quickly, efficiently and create as many jobs as possible.”
While automakers like Ford and GM welcomed the move, production changes will still require significant time and investment, complicating the transition. The tariffs, initially intended to boost domestic manufacturing, have faced criticism for potentially increasing vehicle prices and straining the global supply chain.
“Finding a way to get the auto industry back working has to be paramount in this,” said Sam Fiorani, analyst at business forecasting firm AutoForecast Solutions. “The tariffs have not looked at this industry, the way it works, and expect it to be able to jump and relocate production at the blink of an eye. It just doesn’t work that way. Making a production change for vehicle manufacturing takes minimum, months, and usually years, along with hundreds of millions if not billions of dollars and so it is not something that they take lightly.”
Source: Associated Press
Autonation: Carmakers Will Only Raise Prices as Last Resort | April 28
Automakers are preparing for potential price increases due to tariffs but aim to raise prices only as a last resort according to AutoNation. No carmaker “wants to give up market share, and every single vehicle sold has” a competitor, AutoNation Chief Executive Officer Mike Manley said on a call with analysts. Because of that, raising prices is “the last lever that’s pulled.” To avoid impacting consumers, automakers are considering alternatives like optimizing supply chains or absorbing initial costs.
Source: Bloomberg
Trump Considering Tariff Relief for Automakers | April 25
President Donald Trump is considering tariff relief for automakers by potentially exempting auto parts imported from China from new levies set to take effect. This development follows significant pressure from automakers and policy groups, who warn that rising costs from stacking tariffs on steel, aluminum, imported vehicles, and auto parts could strain manufacturing and raise production expenses. While some automakers saw a modest rise in shares after the announcement, uncertainty remains as the industry awaits further clarity. Tariff debates continue with statements suggesting additional increases on Canadian vehicle imports as part of efforts to bolster domestic manufacturing.
Source: CBT News
Hyundai Launches Tariff Task Force | April 24
Hyundai Motor reported a two percent rise in first-quarter operating profit to 3.6 trillion won ($2.5 billion), driven by a weaker South Korean won and strong sales of hybrid vehicles, despite challenges from increased sales incentives and tariff uncertainties in the U.S. To address these tariffs, Hyundai initiated a task force, shifted some Tucson production to the U.S., and committed to a $21 billion U.S. investment plan. The automaker also maintained its annual revenue and profit targets while exploring partnerships with General Motors for electric commercial vans and pickups.
“We expect a challenging business outlook to continue due to intensifying trade wars and other various unpredictable macroeconomic factors,” Hyundai said in a statement.
Source: Reuters
US Auto Industry Warns Parts Tariffs Will Hike Prices | April 23
A U.S. auto industry coalition warned in a joint letter to the White House that implementing new tariffs on imported auto parts would significantly increase vehicle costs, reduce sales, and harm American consumers and workers. Industry leaders argue that these tariffs could result in higher repair expenses and limit access to critical components for repairs, ultimately impacting supply chains and customer satisfaction.
“Most auto suppliers are not capitalized for an abrupt tariff induced disruption. Many are already in distress and will face production stoppages, layoffs and bankruptcy,” said the letter. “It only takes the failure of one supplier to lead to a shutdown of an automaker’s production line.”
Source: Automotive News
Ford Considering Raising Prices, Volkswagen to Hold Steady Till June | April 17
Ford Motor may increase prices on new vehicles if auto tariffs persist, as outlined in a memo to dealers. While the company is offering significant discounts through June 2, pricing on models produced from May onward could rise, with potential consumer impact by July.
“In the absence of material changes to the tariff policy as articulated to date, we anticipate the need to make vehicle pricing adjustments in the future, which is expected to happen with May production,” Ford executive Andrew Frick said in the memo.
Automakers, including Ford, have warned that prolonged tariffs could force substantial price hikes, despite short-term sales boosts. Analysis from the Center for Automotive Research estimates Trump’s 25% tariffs could cost U.S. automakers $108 billion by 2025. Ford, producing 80% of its U.S.-sold vehicles domestically, is better positioned than most to handle the tariffs.
While Ford openly considers an increase in prices, Volkswagen of America plans to maintain current prices on its vehicles through at least May. CEO Kjell Gruner, while speaking to media at the 2025 New York auto show, emphasized the challenge of managing business under shifting tariff policies. Noting that VW cannot fully absorb the costs nor expect consumers to pay significantly higher prices.
While VW produces some models like the Atlas and ID4 in the U.S., many vehicles, including the Tiguan, Jetta, and Golf GTI are made in Mexico or Germany, making them subject to tariffs. Moving production to the U.S. would require years and substantial investment, making it unfeasible in the short term. For now, VW is delaying price increases to support customers and dealers, while managing supply chain complexities and timing vehicle imports to navigate the tariff landscape.
Source: Reuters and Automotive News
Honda to Start Producing Civic in U.S. | April 16
Honda has announced plans to shift production of its hybrid Civic from Japan to the United States in response to tariffs imposed by U.S. President Donald Trump. Starting in June or July, production will move from Saitama Prefecture to Honda’s Indiana plant.
“The decision was made based on external factors including the Trump administration’s tariffs,” the automaker said.
While this may help ease import tariffs from Japan, Honda’s vulnerability to U.S. tariffs is also due in part to it importing a significant number of vehicles from Mexico annually. Analysts predict these tariffs could increase U.S. car prices by over 14% and significantly impact automakers’ profits, with Honda potentially facing a 20% drop. Despite this shift, Honda’s production plans in Mexico remain unchanged.
Source: Bloomberg
Trump Considers Auto Tariff Exemptions | April 14
President Donald Trump is considering potential temporary exemptions to his 25% auto industry tariffs, aiming to give manufacturers time to shift production to the United States. Speaking from the Oval Office, Trump cited the need to assist automakers in adjusting their supply chains and transitioning to domestically produced components.
“I’m looking at something to help some of the car companies, where they’re switching to parts that were made in Canada, Mexico and other places,” Trump said. “And they need a little bit of time, because they’re going to make them here.”
These exemptions could provide relief for automakers like Ford, General Motors, and Stellantis, whose stock values surged following the announcement. The tariffs, implemented in early April, impose significant levies on foreign cars and light trucks unless covered by the Canada-United States-Mexico Agreement. However, parts imported under the agreement remain subject to selective duties with levies on foreign auto parts planned to go into effect no later than May 3. If further delays or exemptions are put in place, there’s no telling when or how certain parts, such as transmissions and engines, will be affected.
“There has to be a runway of some kind to make the changes the administration would like to see,” said Mitch Zajac, an automotive and supply chain attorney with Butzel Long in Detroit. “If we have to do this, it can’t be done overnight.”
Source: Bloomberg
Auto Tariffs Still in Place Even After 90-Day Pause | April 9
President Donald Trump announced a 90-day pause and reduction on reciprocal tariffs for imports, but the 25% tariffs on imported autos remain in effect. Additionally, Trump increased tariffs on all Chinese goods to 125% in response to China raising tariffs on U.S. exports, though he temporarily reduced reciprocal tariffs for other nations to 10% during the pause to negotiate new trade deals. Treasury Secretary Scott Bessent confirmed that the pause excludes sector-specific tariffs like those on autos.
“Pausing tariffs is good news and could help consumer confidence despite the pause not including the 25% foreign auto tariff announced March 26,” Morningstar autos analyst David Whiston told the Detroit Free Press. “Any sign to think consumers are better off will be welcomed enthusiastically by the market however, foreign auto tariffs are still out there as is an additional 25% for non-USMCA compliant vehicles.”
Source: USA Today
Mercedes Won’t Pass Tariff Costs to Car Buyers | April 8
Mercedes-Benz has announced that it will not pass the financial burden of potential tariffs onto its customers. Despite the 25% tariff on imported vehicles, Mercedes said it will not increase sticker prices on any of its 2025 model year cars and is set to absorb the cost difference.
“We continue to monitor the situation closely, are evaluating all options, and will adjust to changing market conditions and the competitive landscape if needed,” Mercedes-Benz spokesperson Michael Minielly said.
Unlike brands wholly reliant on imports, Mercedes-Benz benefits from producing a significant portion of its U.S.-sold vehicles domestically. Models like the GLE-Class, GLS-Class SUVs, and electric EQE and EQS SUVs are manufactured in Alabama, comprising a major share of the over 324,000 vehicles sold by Mercedes in the U.S. in 2024. By maintaining stable pricing, Mercedes strengthens its competitive edge, particularly against brands like Audi and JLR, which have halted imports and are exploring price increases for future shipments.
BMW has also taken a measured approach to the tariff, opting to follow Mercedes’ lead and absorb additional costs on select Mexico-built models, including the 3-Series, 2-Series Coupe, and M2 models. The company’s strategy is also bolstered by its significant domestic production capabilities at its Spartanburg, South Carolina, facility, which manufactures a range of high-demand X-series SUVs. These models, such as the X3 and X5, were standout performers in 2024, accounting for a combined 141,146 of BMW’s 371,346 U.S. sales for the year.
Source: Road & Track
Hyundai Pricing Will Hold Steady Till June | April 7
Hyundai announced a commitment to maintain its current MSRP for any vehicles purchased or leased through June 2.
“We know consumers are uncertain about the potential for rising prices, and we want to provide them with some stability in the coming months,” said José Muñoz, president and CEO of Hyundai Motor Company.
However, MSRP does not necessarily mean that dealer prices will not increase and that’s before considering potential longer-term effects on pricing for components and raw materials. Still, it should be noted that Hyundai’s models manufactured in the US, such as the Santa Fe, Santa Cruz, and Ioniq 5, will be largely insulated from import tariffs.
Hyundai’s investment in US manufacturing has grown significantly, with its new Georgia plant producing the Ioniq 5 and the Ioniq 9 electric SUV entering production this spring. This facility, along with its Alabama plant, is set to boost total domestic vehicle production capacity to nearly 700,000 annually. Hyundai’s recent $21 billion investment in US operations supports its strategy to mitigate tariff impacts while enhancing its product lineup.
Source: Autoweek
Volkswagen Temporarily Freezing Audi Imports | April 7
Volkswagen has decided to hold all Audi vehicles, that arrived in the U.S. after April 2, in ports due to the newly imposed 25% tariff on auto imports. Audi, which relies heavily on imports for its U.S. inventory, including its best-selling Q5 model produced in Mexico, still has around 37,000 vehicles in stock. That’s enough for about two months of sales.
The company has also frozen shipments to the U.S. until further notice, according to a memo sent to dealers, as it evaluates the long-term impact of the tariffs. This move comes amidst broader industry uncertainty, with automakers strategizing on how to navigate the new trade landscape. European auto executives are set to meet with EU President Ursula von der Leyen to discuss potential responses to the tariffs, which have already caused significant market disruptions.
Source: Reuters
GM, Ford, Other Top Brands Begin Their Tariff Response | April 4
In the immediate aftermath of the 25% tariffs going into effect on April 3, top automakers responded in a variety of ways. General Motors increased truck production at their Fort Wayne, IN facility and Nissan walked backed production cuts at its Smyrna, TN assembly facility. Elsewhere, Ford instituted widespread employee pricing in an effort to appeal to customers before potential price increases.
Read More: Automotive Roundup: Top Brands Begin Their Tariff Response
Auto Economists: Tariffs Will Raise Prices for the U.S. Car Buyer | April 1
The newly imposed 25% tariff on imported vehicles is expected to significantly raise car prices in the U.S. with automakers likely passing increased costs onto consumers. Analysts predict that the tariffs will add thousands of dollars to vehicle prices, disrupt supply chains, and inflate repair and insurance costs due to higher parts prices.
While some manufacturers may invest in U.S.-based production to mitigate long-term impacts, the immediate effect is heightened affordability challenges for consumers, reduced sales forecasts, and increased economic uncertainty in the automotive market.
Read More: Auto Economists: Tariffs Will Raise Prices for the U.S. Car Buyer
Trump: I Don’t Care If Car Prices Go Up Because of Tariffs | March 30
In a phone interview with Meet the Press anchor Kristen Welker that aired on March 30, President Trump asserted that he was not backing down on his tariff plan that has raised the concerns of automakers, economists and dealers alike. He reiterated that the 25 percent tariff was “absolutely permanent” and dismissed concerns from foreign automakers and dealers about the cost of a car going up.
“I couldn’t care less if they raise prices, because people are going to start buying American-made cars,” President Trump told Welker. After the interview, an aide to the president followed emphasized Trump was referring specifically to foreign car prices.
Read More: Trump: I Don’t Care If Car Prices Go Up Because of Tariffs
President Trump: 25% Auto Tariffs Effective April 2 are “Permanent” | March 26
President Donald Trump signed an executive order that goes into effect April 2 imposing a 25 percent tariff on cars built outside of the U.S.
“We’ll effectively be charging a 25 percent tariff, but if you build your car in the United States, there is no tariff,” Trump told reporters during a signing ceremony March 26. “What that means is a lot of foreign car companies are going to be in great shape because they’ve already built their plant” in the U.S.
Trump said the tariffs will go into effect on the same day the administration will unveil reciprocal tariffs on a slew of imports.
Read More: President Trump: 25% Auto Tariffs Effective April 2 are “Permanent”
Hyundai Commits to U.S. Manufacturing Expansion with $21B Investment | March 24
A new plant in Louisiana is the centerpiece of Hyundai’s $21 billion investment over the next three years in the U.S. that President Donald Trump promoted as a result of the effectiveness of his tariff economic policy.
Hyundai officials made the announcement at the White House on March 24 to expand its manufacturing capabilities with Hyundai’s first ever steel mill in the U.S., advance future technologies, and enhance energy infrastructure.
“Hyundai Motor Group is deepening its partnership with the United States, reinforcing our shared vision for American industrial leadership,” said Hyundai Chairman Euisun Chung said in a statement announcing the investment. “The group’s investment and efforts will further expand our operations in the U.S. and grow our American workforce. We’re proud to stand with you, and proud to build the future together.”
Read More: Hyundai Commits to U.S. Manufacturing Expansion with $21B Investment | Digital Dealer
