A growing number of vehicle manufacturers across the globe are voicing concerns over tariffs that could come into effect following Donald Trump’s election victory.
Mr Trump won the race to become America’s 47th President by promising big shifts to the country’s domestic policy, including new ways to support the automotive industry.
Speaking at a pre-election rally in Michigan, often regarded as the American hub of vehicle making, Donald Trump promised hefty tariffs on imported models.
He explained: “Here is the deal that I will be offering to every major company and manufacturer on Earth: I will give you the lowest taxes, the lowest energy costs, the lowest regulatory burden, and free access to the best and biggest market on the planet.
“But only if you make your product here in America. It all goes away if you don’t make your product here. If you don’t make your product here, then you will have to pay a tariff, a very substantial tariff.”
Autocar reports that the move could spark panic in the UK industry, particularly among five luxury brands – JLR, Bentley, Aston Martin, Mclaren and Rolls-Royce – who comprised the majority of the 73,571 exports made to the US in 2023
The comments made by President Elect Donald Trump were particularly aimed at companies establishing factories in both Mexico and China.
Both countries have recently experienced a surge in vehicle production, with Mexico’s automotive output increasing some 68 percent between 2016 and 2024.
Many car companies use the two countries due to lower labour costs, which results in more profitability and cheaper prices on the forecourts.
Michigan, David Christ, Group Vice President and General Manager of Toyota Division, stated that entirely producing vehicles in America would be a difficult task, with various components typically coming from across the world.
He added: “The thing with tariffs, it’s not as much on the car as it is on the part. The global supply chain is so big and so diverse that it would be really difficult to build every part in one location.
“Because of that, tariffs may not affect the car because it’s built in the US, but might affect a lot of parts that go on the car, which thereby raises the price for the consumer.”
Speaking to Euronews, Simon Schuetz from The Association of the German Automotive Industry (VDA), an industry body representing the interests of brands such as Volkswagen, BMW, and Mercedes-Benz, called for talks to prevent European vehicle manufacturers from being subject to the charge.
He continued: “I think that both sides need to talk to prevent this. If it does, we both know what will happen next. The European Union would probably have some measures in response, and that would be the start of another trade conflict or something of that kind.
“That’s not what we need. Europe and the US need to understand that, looking at the geopolitical challenges, we need to work together, and that politics and economics needs to be considered together.”
