ANN ARBOR, Mich.—The latest financial analysis from the Center for Automotive Research has found that the Trump administration’s 25-percent automobile tariffs on all trading partners could add $107.9 billion in costs to the U.S. automotive industry.
K. Venkatesh Prasad, senior vice president of research and chief innovation officer at CAR, said that the analysis “emphasizes the complexity of the modern automotive supply chain.” The Detroit Three manufacturers alone—Stellantis, Ford and General Motors—could see costs increase by $41.9 billion.
“The modern automotive supply chain is both global and complex, convoluting the seemingly simple question of the cost of 25 percent tariffs on the industry,” Prasad said. “Auto makers and their suppliers are often multinational companies with facilities spread out across the world, making it difficult to discern how much of a vehicle is domestically produced.”
The accuracy of the research is contingent upon previously stated assumptions that the tariffs would be a uniform 25-percent tariffs on imported auto parts and light vehicles. The tariff plan “presents both urgent challenges and significant opportunities for industry stakeholders,” the research center said,
“All vehicles—whether produced or sold in the U.S.—would be affected by the 25-percent tariffs, as no vehicles are built with 100-percent U.S. domestic content,” CAR said. “As a result, all auto makers operating in the U.S. would face increased costs due to tariffs on both imported parts used in domestic production and on imported vehicles.”
