Donald Trump’s government has put US tariffs on the automobile sector, which is considering several countermeasures to keep the new taxes from impacting its profit and loss statement. Nonetheless, car manufacturers seem to disagree with the new measure, and they are willing to fight back. The first actions taken by the manufacturers while they awaited the success of the negotiations between the United States and the other nations were the suspension of automobile exports and the raising of vehicle prices. Automobile manufacturers that have already replied to the White House include Jaguar Land Rover, Audi, Volkswagen, and Stellantis.
Global Car Manufacturers will hold their exports in a strategic move to fight against US Tariffs
Automakers are already researching several options to deal with Donald Trump’s protectionist policies, according to industry sources who spoke with this newspaper and confirmed this. In the first scenario, manufacturers are optimistic about the possibility of reaching a deal with the White House that would reduce US tariffs to zero; in the second, they are neutral and would reduce tariffs for nations that produce in the US regardless of the model; and in the third, they are pessimistic, and Trump would continue to impose tariffs on the import of cars to US ports.
In the first case, negotiations between the European Commission (EC) and the US are still possible. As a negotiating chip, the EC offers Washington a reduction of zero percent in the levies on the shipment of industrial items to the Old Continent in exchange for the 25% tariffs on automobile imports. But it appears that the White House is not very receptive to the discussion. Americans should be aware that Commissioner for Trade and Economic Security Maros Sefcovic made an offer to defuse the tariff offensive during recent interactions with American counterparts Howard Lutnick, Secretary of Commerce, and Jamieson L. Greer, Trade Official for the Trump Administration. During his 24-hour trip, Sefcovic met with Lutnick and Gree to discuss the situation.
The impact of the US tariffs on global car manufacturers
In the meantime, companies including Stellantis, Audi, Volkswagen, and Jaguar Land Rover have already responded to US tariffs. The English carmaker was the last to do so, stopping shipments to the US while it thinks about ways to lower the cost of car import taxes. As a result, it will only have a supply of cars for two months. In 2024, Jaguar Land Rover sold 430,000 cars in the United States, with over 25% of those sold being domestically built. This means that 75% of the brand’s U.S. sales would be impacted by the levies.
The new US tariffs have a significant impact on the 200,000 workers directly employed by the British auto industry. According to data from the SMMT, an industry association, the United States has a market share of about 20% and is the second-largest importer of automobiles built in the United Kingdom, behind the European Union.
What could be the impact of the US tariffs if the matter keeps escalating?
President Donald Trump intensified a confrontation with the only country that could defeat the US in a trade war while retreating from a massive front of international tariff wars. Amidst much anticipation last week, Trump abruptly declared on Wednesday that all of the “reciprocal” tariffs would be suspended for 90 days. However, in the most recent round of a tit-for-tat competition that has left the world’s two giants in a stalemate, he left out China and raised its tax from 104% to 125%. After days of stock market losses and growing concerns that he was on the verge of plunging the US economy into a catastrophic catastrophe, the president decided to soften his stance on reciprocal penalties.
Although he may have been trying to preserve face by reversing his earlier approach, his increased focus on China will only heighten concerns that commerce between the two biggest economies in the world could stagnate and thus severely impact both parties and the entire worldwide economy. The White House attempted to turn a humiliating retreat into a major win by claiming that a rush of nations wishing to make deals with Washington was the reason the reciprocal US tariffs were put on hold. China was punished, it said, for enacting its tariffs in retaliation for Trump’s trade war.
