Trump’s Tariffs: Uncharted Waters for the Auto Industry – Which Companies Are Hit Hardest?

The global auto industry is experiencing significant upheaval due to tariffs announced on all imported vehicles and vehicle parts in the USA. Donald Trump claims his goal is to boost domestic car production and reduce the trade deficit. However, many analysts argue that imposing such tariffs on foreign automakers may not necessarily strengthen American car industries. In 2024, the U.S. imported cars worth $219.49 billion, marking a 4% increase compared to the previous year. The main countries of origin were Mexico, Japan, South Korea, Canada, and Germany. These tariffs will immediately impact Japanese companies Toyota and Honda, South Korean Hyundai and Kia, as well as German BMW and Mercedes-Benz. These companies have manufacturing plants in the U.S., but import a large number of vehicles and parts. Meanwhile, Elon Musk’s close partner Tesla is expected to be a major beneficiary. Volkswagen of America has announced plans to impose an additional ‘import fee’ on vehicles assembled outside the U.S., suspending rail shipments from Mexico to the United States according to an internal memo. Turkey also maintains a notable presence in the U.S. market through the export of automotive components. Many Americans rushed to purchase Japanese and European cars in Q1 of 2025 to avoid these tariffs, with total sales of new vehicles reaching 3.835 million units, up by 5.1% compared to the same period last year.