Donald Trump’s tariffs could cost US carmakers $108bn

A new analysis by the Center for Automotive Research has found that US President Donald Trump’s 25% vehicle tariffs imposed in early April will increase costs by about $108bn for carmakers in the US in 2025.

The study found Detroit carmakers Ford, General Motors and Stellantis, maker of Jeeps and Ram trucks, specifically would see increased costs of $42bn. The study found the Detroit Three could see tariffs of nearly $5,000 for the parts they import on average for each car produced in the US, and about $8,600 on average for each car they import.

Trump’s 25% 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 carmakers compliant with the terms of the US-Mexico-Canada Agreement can deduct the value of US content.

The tariffs have pushed carmakers 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 vehicle makers will see an average cost of the tariff per vehicle for imported vehicle parts of $4,911, higher than the overall industry's average of $4,239 per vehicle.

For imported vehicles, the study found the average tariff cost per vehicle to be $8,722 for the overall industry and $8,641 for the Detroit Three.

Matt Blunt, president of the American Automotive Policy Council, representing the Detroit Three carmakers, said in a statement that the study “demonstrates the significant cost a 25% tariff will have on the automotive industry. US carmakers Ford, GM and Stellantis intend to maintain our ongoing dialogue with the administration to achieve our shared goal of increased US automotive production”.

GM and Stellantis deferred to the trade group’s comment and Ford was not immediately available.

Reuters