Tariff Talk: The Latest Headlines

Since we last talked, here are some of the things that have taken place and some of the declarations made by automakers in regards to U.S. Auto Tariffs.  These are some of the headlines:

• Ford halted shipments of its SUVs, pick-up trucks and sports cars to China, as retaliatory tariffs mean its vehicles face taxes of up to 150%.
• Toyota will build more RAV4s in the U.S. starting immediately.
• Porsche dealers say they have not received shipments of new vehicles from U.S. ports for several weeks as the automaker grapples with tariffs.
• About a quarter of total U.S. automotive assembly capacity was not being used at the end of 2024, according to industry data, leaving automakers some opportunities — at least in theory — to shift production stateside and avoid tariffs without building new plants.
• Nissan will boost U.S. production of its bestselling Rogue crossover by more than half in response to the Trump administration’s tariffs on imported vehicles.
• Hyundai Motor Co. said it has launched a task force to respond to U.S. tariffs, adding that production of some Tucson crossovers has been shifted from Mexico to the U.S.
• BMW, in an April 29 memo, told U.S. retailers that it will “postpone” electric vehicle production in May. The memo did not provide a reason for the decision, and a BMW spokesperson declined to comment on the company’s communications with its dealers. BMW also said in the memo that it will not raise prices on most imported vehicles built through June.

This on your trade values going up as I’ve told you all month on the Car Pro Show:

• Used-vehicle prices are on the rise as U.S. trade tariffs disrupt the overall automotive market. Prices increased in April at almost double the normal spring rate, according to vehicle data provider Carfax, which said used-vehicle sales more than doubled year-over-year. Used prices rose nationally and in all segments, Carfax found. Pickup trucks and luxury SUVs saw the biggest price increases in April, surging $660 and $600 on Carfax’s website, respectively, according to its data.
  Source: Auto Dealer Today

Tuesday’s actions by President Trump, in summary:

The President provided Temporary Relief/Adjustments signing an order moving to ease some of these tariff rules in response to pushback from car manufacturers. He signed an executive order to “relax” parts of the auto tariff​

In practical terms, the White House is allowing automakers to have a certain portion of their car parts exempt from the tariff (through credits or rebates) for a couple of years. This gives companies time to adjust their supply chains and start making more parts in the U.S. without immediately paying the full 25% on every component. For example, automakers that assemble cars in the U.S. can import some parts tariff-free (up to a value limit), especially parts from Canada or Mexico that meet existing trade-agreement rules​.  However, parts from China do not get this relief and remain heavily taxed​.  The idea is to soften the blow in the short term while still pressuring companies to bring manufacturing back to America.

Another adjustment Trump made is to prevent “stacking” multiple tariffs on the same item. For instance, cars and parts already hit by the new 25% auto tariff won’t be charged additional steel or aluminum tariffs on top of that​

The changes were a response to industry worries that overlapping tariffs would really pile on costs. By ensuring only the higher of the applicable tariffs is paid, the administration aims to limit immediate cost increases for manufacturers, and ultimately the price of cars.  He’s trying to balance being tough on imports with not harming U.S. auto companies in the process.​

GM CEO Mary Barra talks tariffs, pricing, and GM’s profit outlook

I wanted to share an interview from yesterday on Fox Business with GM CEO Mary Barra.  She doesn’t do many interviews, and she was surprisingly frank and complimentary of the tariffs, which surprised me to be honest.  She covers a lot of interesting territory here and I think you’ll find it to be good info whether you are a follower of the auto industry or not.

Photo Credit: Nissan Smyrna Vehicle Assembly Plant. Nissan.