On January 15, 2025, newly imported and unregistered Honda vehicles were seen parked in a storage yard at the Port of Bristol, near Bristol, England.
Anna Barclay | Getty Images
Shares of automakers in Asia dropped following the announcement from U.S. President Donald Trump regarding the imposition of tariffs on vehicles not manufactured in the U.S.
Japanese automakers Toyota and Honda saw declines of 3.69% and 2.91% respectively. Nissan, also faced a drop of 2.92%, while Mazda Motor experienced a loss of over 6%. In addition, Mitsubishi Motor saw a drop of 4.9%.
Kia Motors of South Korea, which operates a manufacturing facility in Mexico, saw a decrease of 2.76%. Likewise, shares of Chinese manufacturers Nio and Xpeng fell by 3.94% and 1.97% respectively.
These new tariffs are set to take effect on April 2. White House aide Will Scharf indicated that the tariffs will target “foreign-made cars and light trucks,” in addition to existing duties.
The complete details of the proclamation remain vague, especially given that most vehicles are composed of parts sourced from multiple countries.
According to Scharf, these tariffs might generate more than $100 billion in new annual revenue for the U.S.
Karl Brauer, an executive analyst at iSeeCars, noted, “Every automaker that sells vehicles in the U.S. relies on global supply chains for automotive parts, many of which originate from China.”
He stated via email to CNBC, “Even if Honda or Toyota assembles a model within the U.S., the parts imported from China will contribute to increased production costs for those vehicles,” suggesting that these costs could either reduce an automaker’s profit margins or be transferred to consumers as higher prices.
Vehicles manufactured in the U.S. will also be affected, albeit to a lesser extent, depending on the proportion of foreign components used, the analyst confirmed.
“No automotive retailer in the U.S. will be able to evade the consequences of these tariffs,” Brauer stated.
European Commission President Ursula von der Leyen criticized the tariffs on the social media platform X, asserting that the European Union will persist in seeking negotiated solutions “while protecting its economic interests.”
Joseph McCabe, CEO and President of AutoForecast Solutions, remarked, “The fact that it’s a signed executive order gives it more weight than we initially anticipated.”
He added, “Rolling it back prior to April 2 seems unlikely. This will likely be in effect for a couple of weeks, if not longer, and we may witness significant consequences during that period.”
