Study finds Trump’s 25% auto tariffs could cost US automakers $144b
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Mr Trump’s 25 per cent automotive import tariffs took effect April 3, causing shock waves across the industry.
PHOTO: REUTERS
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DETROIT - A new analysis by the Centre for Automotive Research has found that US President Donald Trump’s 25 per cent auto tariffs imposed in early April will increase costs by about US$108 billion (S$144 billion) for automakers in the US in 2025.
The study, released on April 10 by the Ann Arbor, Michigan-based organisation, found Detroit automakers Ford Motor, General Motors and Stellantis, maker of Jeeps and Ram trucks, specifically will see increased costs of US$42 billion.
The study found the Detroit Three could see tariffs of nearly US$5,000 for the parts they import on average for each car produced in the US, and about US$8,600 on average for each car they import.
Mr Trump’s 25 per cent automotive import tariffs took effect on April 3, causing shock waves across the industry, since supplies come from all over the world.
Vehicles made in Mexico and Canada face the levy, but automakers compliant with the terms of the US-Mexico-Canada Agreement can deduct the value of US content.
The tariffs have pushed automakers to make production changes, with GM increasing truck output at an Indiana plant and Stellantis temporarily shutting down production at a plant in Mexico and one in Canada. These moves affected five US facilities that are connected to them.
The study estimates the Detroit Three automakers will see an average cost of the tariff per vehicle for imported vehicle parts of US$4,911, higher than the overall industry’s average of US$4,239 per vehicle.
For imported vehicles, the study found the average tariff cost per vehicle to be US$8,722 for the overall industry and US$8,641 for the Detroit Three.
Mr Matt Blunt, president of the American Automotive Policy Council, representing the Detroit Three automakers, said in a statement that the study “demonstrates the significant cost a 25 per cent tariff will have on the automotive industry”.
“American automakers Ford, GM and Stellantis intend to maintain our ongoing dialogue with the administration to achieve our shared goal of increased US automotive production,” he said.
GM and Stellantis deferred to the trade group’s comment, and Ford was not immediately available. REUTERS
