These Car Brands Face Major Hits from Trump’s Tariffs

These brands and vehicles have the lowest and highest chances of being impacted by the new tariffs.

Recently, President Trump implemented a 25 percent duty on all imported automobiles. This would result in increased prices within the United States for cars manufactured abroad, which includes countries like Canada and Mexico. Additionally, components sourced from overseas intended for use in U.S.-assembled vehicles will also face this tariff, as stated by him.
declaration released by the White House
.

President Trump stated, ‘If you manufacture your car in the United States, there won’t be any tariffs.’

The tariffs will come into play starting on April 3rd, with President Trump indicating they might become ” permanent.” The key issue now is identifying which cars and makes stand to gain the most from these new duties, as well as determining which models could suffer the greatest impact.

The Big Winners

Exploring the Kogod School of Business once again
2024 American-made index
, Tesla stands to gain the most from these new tariffs. Every one of Tesla’s vehicles has more than 80 percent domestic content overall.

At the pinnacle of the ranking stands the Model 3 Performance, boasting domestic production and assembly at 87.5%. Following closely behind are the Model Y (with an 85% domestic content rate), Cybertruck (which has 82.5%), along with both the Model S and Model X each contributing domestically at an 80% level.

This being the case, Tesla CEO Elon Musk indicates that the company won’t remain “untouched” with the introduction of new tariffs. As shared in a post on
X
(formerly
Twitter
Musk stated, “It’s crucial to understand that Tesla has not remained untouched through this. The effect of these tariffs on Tesla continues to be substantial.”

Although the firm manufactures engines and batteries within the United States, Tesla continues to import numerous components from China. Excluding the locally produced motors and batteries, the Model 3 Long Range has “40 percent of its parts sourced from China,” notes Frank DuBois, an associate professor specializing in information technology and analytics at American University.
told
Kelley Blue Book
last year.

Coming in second after Tesla is Ford, which has three variants of the Mustang built primarily from domestically sourced materials at an 80% rate: the automatic version, the GT, and the GT Coupe Premium. In contrast, the Mustang GT equipped with a manual transmission—from Getrag in Germany—is composed of approximately 73% U.S.-made components.

Honda performs impressively with the Passport, scoring 76.5 percent domestically made content, along with the Odyssey, Ridgeline, and Pilot, each boasting a rating of 74 percent. The Jeep Wrangler has 76 percent locally sourced components. In addition, the Volkswagen ID.4 includes 75.5 percent domestic materials. Similarly, General Motors’ Chevrolet Colorado and GMC Canyon models achieve a mark of 75.5 percent for their U.S.-made content.

Among the top three car manufacturers in Detroit, General Motors is considered the most vulnerable based on President Trump’s proposed tariffs, as stated by JPMorgan analyst Ryan Brinkman. Given that almost 40 percent of GM’s vehicles are manufactured in either Canada or Mexico, Brinkman predicts this could result in an impact of approximately $14 billion on their profits.

In this regard, the White House has admitted that cars made under the United States-Mexico-Canada Agreement (USMCA) will get particular allowances. Particularly, components manufactured according to USMCA guidelines won’t face tariffs until the Commerce Secretary sets up a procedure for handling non-US materials.

The Big Losers

At the other extreme, certain international car manufacturers might experience significant losses in their US market due to these new tariffs. Companies such as Audi, BMW, Lexus, Mazda, and Toyota manufacture several models that consistently place at the lower ranks of the Made-in-America index.

Particularly, some of our beloved budget-friendly sports cars might face significant impacts. Models such as the Miata, the Subaru BRZ, the Toyota GR86, and the GR Corolla receive only a 1% rating on the U.S.-made scale. Several BMW performance vehicles also fall into this category with scores of merely 1%, including the M3 sedan, the Z4, and the discontinued M8.

In 2024, with vehicles accounting for 28.3 percent of Japan’s total exports to the U.S., automobile manufacturers might face significant impacts from the newly imposed tariffs. As reported,
Reuters
, stocks of Nissan, Toyota, and Honda had dropped by 2.2 percent, 2.7 percent, and 3.0 percent, respectively, after the statement was made. Meanwhile, Hyundai and Kia each declined by 4.0 percent.

Japanese Prime Minister Shigeru Ishiba states that they will consider every possible approach to counteract Trump’s tariffs.

“Ishiba stated in a parliamentary address that Japan leads all nations in investments towards the United States; hence, it seems questionable whether imposing equal tariffs on every nation aligns with Washington’s interests. We have consistently highlighted this viewpoint and will keep doing so,” he emphasized.

The Big Picture

Trump’s 25 percent tariff is likely to increase prices on foreign-imported cars. But former Vice Chairman of Product Development at GM, Bob Lutz, says these more stringent regulations on auto imports are a long time coming.

“Tariffs that Trump is implementing roughly reflect those enforced by our key trade partners for many years,” Lutz mentioned to
Motor1
There is no question that these duties will raise the cost of non-US vehicles, leading to a drop in their sales figures. This is precisely what tariffs aim to achieve.

At present, the European Union applies a 10 percent duty on vehicles imported from the United States, along with an extra 20 percent VAT. However, the EU has lately suggested reducing this rate from 10 percent down to 2.5 percent as part of their efforts to alleviate trade disputes with the U.S.
according to some reports
.

Lutz points out that ‘the U.S. must safeguard its residual industries,’ much as every other country does. While tariff-free imports result in lower consumer costs, they simultaneously lead to a reduction in manufacturing positions, ultimately causing national deterioration.

These fees will lead to temporary discomfort and disruption, yet the adaptation process should be quick and advantageous for worldwide commerce. It’s unsustainable for the US to continually experience massive trade gaps each year with major trading allies.

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