The big news this week happened Wednesday night when a federal trade court ruled against the Trump administration regarding tariffs. I have the details as we know them at press time, and other tariff-related news headlines that caught my attention:
- A federal trade court threw a wrench into Donald Trump’s sweeping 2025 “Liberation Day” tariffs, ruling that the president exceeded his authority under emergency powers law when he imposed broad levies, including many targeting imported cars and parts. While this specific ruling could eventually invalidate some of the tariffs, many others — especially those tied to national security under different statutes — remain firmly in place, and the automotive industry is still reeling. Automakers are scrambling to adapt, with Hyundai reportedly mulling a price hike across its U.S. lineup to counter the added cost of parts. Stellantis has already paused some North American operations, furloughing workers amid uncertainty and rising expenses. General Motors, on the other hand, has doubled down on its support for the tariffs, with CEO Mary Barra defending them as a long-overdue correction to global trade disadvantages and announcing nearly $900 million in upgrades to a New York powertrain facility. Industry analysts, however, warn the tariffs could cost U.S. automakers around $26 billion annually, with ripple effects likely to hit suppliers, dealers, and ultimately, buyers. The White House has vowed to appeal the court’s decision, and until that shakes out, automakers remain caught in a transpacific game of tariff ping-pong, trying to plan production while the legal scoreboard keeps changing. Many automotive components were excluded from the sectoral tariffs in the ruling. Those components have been subject to the global reciprocal tariffs and tariffs in response to drug trafficking. The court’s decision means many imported auto parts — such as door handles, hood panels and electronic control units — that were subject to reciprocal and drug trafficking tariffs are now duty-free.
- Hyundai Motor is reportedly contemplating a 1% price hike on its U.S. vehicle lineup to offset the financial impact of the 25% tariffs on imported vehicles and parts. The increase would apply to newly built vehicles, excluding existing dealership inventory.
- Several major companies, including Ford, Stellantis, and Mercedes-Benz, have revised or withdrawn their financial guidance for 2025 due to uncertainties introduced by tariffs and supply chain challenges. This trend reflects broader corporate struggles to navigate an unpredictable economic environment shaped by trade policies.
- Germany's leading automakers—BMW, Mercedes-Benz, and Volkswagen—are in discussions with the U.S. Department of Commerce to negotiate tariff relief. They propose leveraging their U.S. investments and exports to obtain credits for vehicles exported from the U.S., aiming to mitigate the impact of current tariffs. A potential deal could be reached in June, contingent on commitments to substantial U.S. investments.
- General Motors CFO Paul Jacobson stated that the company is taking a "wait-and-see approach" regarding its imports from South Korea amid the ongoing tariff situation. While no immediate changes are planned, GM is closely monitoring developments that could affect vehicles like the Chevrolet Trax, which is built in South Korea.
- According to a report by Yale's Budget Lab, the 2025 tariffs have led to a 0.6% increase in consumer prices in the short term, equating to an average loss of $950 per household. Specifically, motor vehicle prices have risen by 8% in the short run and are projected to settle at a 5% increase in the long run, adding approximately $2,400 to the cost of an average new car.
Editorial Use Only. Photo Credit: gguy/Shutterstock.com. Munich, Germany, April 6, 2025.