Trump is scrambling global automakers’ reliance on America
Subscribe to enjoy similar stories. Facing intense competition in China and heavy regulation in Europe, overseas automakers were counting on the U.S. to keep their engines humming.
Then came President Trump’s tariffs threats. Since taking office, the U.S. president has taken aim at the 25% tax on shipments from Mexico and Canada, reciprocal tariffs based on other partners’ own trade restrictions, and specific tariffs for sectors such as autos and semiconductors.
On Tuesday, Trump said the sector tariffs could be “in the neighborhood of 25%" and might rise even higher over time. A grace period could give companies time to bring production onshore, he added. In response, automakers from Europe and Asia have been gaming out alternative manufacturing plans to remain competitive in a market that has become increasingly important.
“Things keep changing minute by minute, but our stance is to stay flexible and be able to be agile in reacting to the situation," Honda Executive Vice President Shinji Aoyama said last week. Trump has long railed against auto imports, particularly from Europe. The European Union’s 10% tariff on imported cars, compared with an equivalent 2.5% U.S.
tariff, was one example of “lack of reciprocity" cited by the White House when announcing the reciprocal-tariff plan. Last year, roughly half of the almost 16 million light vehicles sold in the U.S. were imported.
Those imports were split roughly equally between assembly plants in Mexico and Canada—within the USMCA free trade area—and plants outside of North America. Detroit manufacturers General Motors, Ford and Stellantis and their suppliers are heavily reliant on shipping goods back and forth across the U.S. land borders and have been lobbying the White
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