Trump's new tariffs: Tesla shielded, global carmakers hit
Donald Trump announced that on 2nd April, a 25% tariff will be imposed on all cars and light trucks imported from abroad. Bloomberg Agency reports that the decision of the US President "will hurt carmakers around the world. Among the many losers, one winner stands out: Elon Musk’s Tesla Inc." - it reads.
- What we're going to be doing is a 25% tariff for all cars that are not made in the United States. If you build your car in the U.S., there’s no tariff - said Donald Trump, announcing his decision in the Oval Office and signing the order on the matter.
2nd April, the planned day for the tariffs to take effect, Trump called America's "liberation day." Tesla may benefit from the new tariffs.
"The electric vehicle maker has large factories in California and Texas that churn out all the cars it sells in the US, insulating it to a greater degree from Trump’s new levies on auto imports and key components. Major rivals from South Korea’s Hyundai Motor Co. to Germany’s Volkswagen AG and America’s own General Motors Co. meanwhile will soon face sharply higher costs," emphasises Bloomberg.
- There are very few winners. Consumers will be losers because they will have reduced choice and higher prices - assessed Sam Fiorani from AutoForecast Solutions, as quoted by Bloomberg.
Tesla under protection
CFRA Research analyst Garrett Nelson added that Tesla is "the least exposed" to the new tariffs due to its domestic manufacturing operations. Tesla itself emphasised in a post on X that its models "are the most American-made cars."
Elon Musk, however, claims that Tesla will not come out unscathed. In a Wednesday post on X, he described the tariffs as having a "significant" impact on the company. In a later post on X to another user, the billionaire added that the tariffs would have a "not trivial" impact on the prices of imported car parts used by Tesla.
"Between 60% and 75% of the components Tesla uses are manufactured in the US, depending on the model, according to a 2024 filing by the US National Highway Traffic Safety Administration, with the majority of the remaining parts sourced from Mexico. But with the value of the imported parts unclear, the financial impact on Tesla is unknown," responds Bloomberg.
The largest business news agency in the world points out that Trump's tariffs should have a lesser impact on Ford's operations. Even 80% of the cars sold in the USA by this company are said to be manufactured in the USA.
Problems for South Korea
Hyundai may find itself under greater pressure. The South Korean company, together with Kia, has factories in Alabama and Georgia and has announced a $21 (€19.5) billion expansion in the United States. Hyundai alone imported over 1 million cars to the USA in 2024. This could cost the company $7 (€6.5) billion annually. "That accounts for nearly 40% of total operating profit that the two carmakers earned in 2024," it was added.
The tariffs could also reduce Toyota's operating profit by 6% for the year 2026. Toyota could suffer much more - the operating profit might drop by 56%. Subaru's accountants also have a lot of work, estimating that the operating profit will fall by 23%.
Trump's tariffs could also hit the American industry. GM brings in some Chevrolet Silverado pickups from factories in Mexico and Canada, and the basic compact SUV Chevy Trax from South Korea. Meanwhile, Stellantis manufactures Jeep Compass and Wagoneer S SUVs in Mexico. The company imports Chrysler Pacifica minivans from Canada as well as compact Dodge Hornet and Fiat 500 from Italy.
