Increased Tariffs by Trump on Auto Imports: Potential Disruptions for Car Manufacturers, Leasing Companies, and Fleet Operations
The recent increase in U.S. tariffs on imported steel, aluminum, and automotive parts has had a significant impact on the global automotive industry, affecting major brands such as General Motors (GM), Ford, Toyota, Volkswagen, and Hyundai.
Effective June 4, 2025, the U.S. doubled tariffs on imported steel and aluminum from 25% to 50%, with parts made partly from these metals now facing a 50% tariff on the metals portion and a 10% tariff on the non-metal portion. This has led to higher overall tariffs on auto parts than before.
The tariffs exclude the UK, which has a separate deal imposing a 10% tariff on auto exports to the U.S. Reciprocal tariffs and trade negotiations with major auto-exporting countries like South Korea, Japan, Canada, and the EU remain unresolved, with imminent deadlines potentially triggering higher tariffs.
The tariffs raise manufacturing costs, particularly for vehicles reliant on imported steel, aluminum, and parts. This cost increase is often passed on to consumers, raising vehicle prices in the U.S. According to Insurify data analyzed by Visual Capitalist, the price impact varies widely by brand:
| Brand | Projected U.S. Price Increase | |--------------|-------------------------------| | Buick (GM) | 22% | | Hyundai | 22% | | Kia | 21% | | BMW | 19% | | Mazda | 19% | | Lexus | 17% | | Subaru | 16% | | Chevrolet (GM) | 15% | | Nissan | 15% | | Volkswagen | 14% | | Toyota | 14% | | Ford | 13% | | GMC (GM) | 12% | | Honda | 8% | | Jeep | 6% | | Tesla | 3% |
GM brands like Buick, Chevrolet, and GMC face some of the highest price increases, around 12-22%, reflecting their supply chains and steel/aluminum content exposure. Foreign brands such as Hyundai and Kia face the steepest hikes (~21-22%), likely due to their imported parts and assembly practices. Japanese brands like Toyota and Honda have relatively moderate increases (8-17%), possibly due to some North American manufacturing or supply chain adaptations. American brands like Ford and Tesla experience smaller increases (3-13%), with Tesla particularly insulated due to its unique supply chain and production model.
The higher tariffs on steel, aluminum, and derivative parts increase production costs across the board, potentially slowing industry growth or pushing manufacturers to redesign supply chains to source more materials domestically or from tariff-exempt countries. Pending trade negotiations and potential tariff escalations post-July 2025 could further complicate pricing, supply chain planning, and competitive dynamics in the global automotive market.
In conclusion, the U.S. tariff hikes on imported cars and parts significantly raise costs for global car manufacturers, with the greatest price increases hitting brands heavily reliant on overseas parts and assemblies such as Buick, Hyundai, and Kia. Major U.S. brands like GM and Ford see moderate impacts, while Toyota and Volkswagen face intermediate effects. The evolving trade environment pressures all players to adapt their supply chains and pricing strategies amid ongoing negotiation uncertainties. This tariff environment reshapes competitive positioning globally, especially in the U.S. market, altering the cost structure and consumer pricing for many key automotive brands.
- The higher tariffs not only increase production costs for global automotive manufacturers, but they also impact the operational costs of running a vehicle, such as maintenance and insurance, due to the rise in vehicle prices.
- As the weather becomes warmer, it is crucial for vehicle owners to consider the effects of higher vehicle prices resulting from the U.S. tariffs on imported cars and parts, especially when purchasing or servicing their vehicles, to ensure they can afford the additional costs during peak driving seasons.
