Auto industry braces for impact as Trump imposes 25% import tariffs; TikTok enters the trade arena.
Tariffs in Drive Starting April 3, a 25% tariff on all imported cars and parts will take effect, part of Trump’s push to revive U.S. manufacturing. The goal? Bring auto jobs home and reduce reliance on foreign supply chains. But in the short term, prices may rise and production could fall by up to 30%, affecting brands from Toyota to GM. Even Ford and Stellantis, who build abroad, will feel the squeeze.
Nearly half of all cars sold in the U.S. are imported, mostly from Japan, South Korea, Germany, Canada, and Mexico. The market reacted quickly—shares of GM and Ford dropped, while Tesla, less exposed to imports, saw gains. European automakers lost nearly €6B in value.
Germany, Canada, and Mexico call the tariffs a “direct attack,” while the EU is preparing a coordinated response and urging immediate talks to avoid a broader trade war. Some carmakers, including Volvo, Audi, Mercedes, and Hyundai, are already shifting more production to the U.S. Ferrari and parts suppliers like Valeo say they’ll raise prices.
A full reshoring of the auto industry would take years and major investment. But the administration says the disruption is worth it to rebuild long-term economic security—and reclaim America’s role in auto manufacturing.
TikTok Takes the Spotlight in Trade Talks Trump signaled he may ease China tariffs if Beijing cooperates on a U.S.-approved TikTok sale, saying, “Maybe I’ll give them a little reduction… to get it done.” With China’s sign-off required, TikTok is now a key chip in the broader trade standoff.
