Natalie Sherman
Business Reporter, BBC News
Getty Images
One day after US President Donald Trump said he would hit foreign cars and car parts with a new 25%import tax, many largest car manufacturers in the world seemed to be amazed in silence, while they were taking a gesture that should be wreaking havoc in the industry.
Investors have sold actions of car manufacturers in Japan, Germany and the United Kingdom on Thursday, wiping billions of value values such as Toyota, BMW and Jaguar Land Rover.
Companies in America were among the hardest, with General Motors more than 7%.
Tesla’s actions, known for its American factories and whose boss Elon Musk is one of Trump’s largest donors and the closest advisers, were significantly spared success, ending the day.
But Musk warned that even his business would not be immune to pricing disturbances.
“Important to note that Tesla is not unscathed here,” Musk wrote on social networks. “The impact of costs is not trivial.”
The Y model of Tesla, which has exceeded the CARS.com index, 2024 of American manufacturing cars for the third consecutive year, only supplies 70% of its parts in the United States, according to Patrick Masterson, principal researcher for the list.
“The adult to remember, I think people should know about it, is not a vehicle is 100% made in the United States,” he said.
“The consumer will feel it at all levels and I really don’t think that an automotive manufacturer will be spared this, Tesla included.”
The last rates could allocate around $ 300 billion to $ 400 billion imports, according to the parts affected by the order, according to Macquarie. This represents almost 10% of everything the United States brings in the country each year.
It is expected to increase prices from around $ 4,000 to $ 12,000, according to the vehicle.
Many large automotive companies have operations in the United States, while also bringing models or parts from outside the United States.
Japan Toyota, for example, has 10 manufacturing factories in the United States and its Highlander SUVs are strongly ranked on the list of Americans.
But its Prius is shipped from Japan.
General Motors also provides important parts and cars from Korea and Mexico, on which Volkswagen also has strongly, despite the assembly of the Atlas SUV in the United States.
Some companies may be able to redirect work to factories in the United States, has suggested Oxford Economics, but he has warned that such a decision would likely lead to higher prices and “a significantly considerably production in the main trade partners of the United States”.
The action is likely to have a more significant impact on the export of automotive manufacturers from Germany and the United Kingdom, which are known to sell less, higher-end and luxury brands at higher prices, such as Jaguar Land Rover, Mercedes-Benz and Audi.
Ferrari, who ships his cars from Italy, immediately announced a price increase of 10%, to help cover the new cost of duty.
Given that companies are forced to meet the 25%prices, by increasing prices or accepting lower profits, some may decide to fully withdraw certain models from the United States, leading to less choice for American consumers, warned Patrick Anderson, Managing Director of the Economic Group of Anderson.
This could also lead to car manufacturers without a large presence in current manufacturing in the United States, such as Jaguar Land Rover or Porsche, reducing production in their country of origin, potentially affecting jobs.
All the Mitsubishi cars sold in the United States are imported, while Hyundai, which announced plans for a factory in the United States earlier this week, sends most of its South Korea cars.
Trump, who began to discuss the prices on cars during his first mandate, said that his last application of the prices would be permanent, saying that this will stimulate the American manufacturing base.
It follows the previous measures to impose prices of at least 20% on goods imported into the United States of China as well as 25% of samples from certain goods in Canada and Mexico.
An import tax of 25% on all steel and aluminum entering America is also already in force.
It is also about to introduce so-called reciprocal prices against individual countries according to its trade balance with the United States.
The White House said that car tasks would start on April 3, while tariffs on certain car parts should come into force a month later.
For the moment, the parts made in Mexico and Canada – which have traditionally entered the United States under a free trade agreement – will be spared, while managers set up personalized systems.
The sculpture of the pieces of Mexico and Canada, which, according to the White House, would be temporary, was a relief for some in the industry.
But General Motors is still faced with a potential cost increase from around $ 10.5 billion, according to JP Morgan.
Ford’s bill would start around $ 2 billion, more than double over time while the parts on the parts come into force, according to the banking giant estimates.
He said the additional cost in industry would represent more than $ 80 billion.
Jennifer Safavian, president of Autos Drive America, said that her members were still working on the decision of the decision – and other prices that have been recently announced or who are looming.
But she warned that the measure would lead to higher prices, less sales and less production in industry.
“They try to digest this,” she said. “But again, there is no doubt that these prices will have an impact on the American automotive industry.”
