America Sparks a Trade Storm in the Auto Industry: Trump's "Liberation Day" Tariffs Reshape the Global Car Market

U.S. President Trump announced the launch of the "Liberation Day" economic policy, imposing a 25% import tariff on all non-American made cars and parts. This measure has triggered global Supply Chain shocks, putting immense pressure on American automakers and consumers. According to financial media Kobeissi Letter's analysis, this is not only a trade strategy but could also be a turning point for the automotive market.

Imposing a 25% tariff on non-U.S. manufactured cars has raised market concerns.

Just yesterday, Trump officially finalized the executive order imposing a 25% tariff on non-American manufactured cars, causing market turmoil. The three major U.S. stock indices fell across the board, reflecting investors' concerns about the impact of the tariffs.

The Kobeissi Letter points out that tariff policies not only affect the automotive industry but may also increase inflationary pressures and undermine consumer confidence, raising the market's sensitivity to rising Supply Chain costs. The report cites various data, suggesting that this wave of tariff impacts may just be the beginning, and the market has not fully absorbed its long-term effects:

Theoretically, this will increase the average price of new cars sold in the United States but not manufactured by $12,500.

( 4/2 American Tariff Liberation Day! Key points from Trump's press conference: cut the budget, impose tariffs, secure the border, once again criticizing Biden's incompetence )

Tariffs are fully expanded: not just complete vehicles, but parts are also hard to escape.

First of all, this new policy not only targets complete vehicles but also includes automotive parts as taxable items. Even if assembled in the United States, if the parts used come from overseas, customs duties must still be borne.

Taking Tesla ( as an example, even though the brand assembles cars within the United States, 25 to 40% of its parts rely on imports, and it still cannot escape the tariff war.

In addition, major American automakers such as Ford ), General Motors (, GM), and Stellantis will also inevitably be affected due to their significant reliance on assembly and parts supply from Canada and Mexico. This has also led to a drop in related automotive stocks following the policy announcement.

Cost is passed on to consumers: Prices soar, sales slow down

The Kobeissi Letter points out that the average price of new cars in the United States is approaching $50,000. If a 25% tariff is applied, the price of each car could increase by as much as $12,500, which will have a particularly significant impact on mid-range and entry-level models.

The luxury car market is also not spared, as the Italian supercar manufacturer Lamborghini (Lamborghini) is not assembled in the United States, and its Revuelto model will have a base price of $604,000, which is affected by tariffs and will increase by approximately $175,000.

Cox Automotive estimates that the first week of policy implementation will cause up to a 30% disruption in production capacity, leading to a chain reaction such as a rise in used car prices and a decrease in new car discounts, with the final costs likely being passed on to consumers.

White House Calculations and Risks: Significant Tax Revenue, but High Costs

Based on the current total value of automobile imports in the United States of 275 billion dollars, the tariff expenditure will amount to 0.25% of GDP. Undoubtedly, this move also puts pressure on trade relations between the United States and major exporting countries such as the United Kingdom: "The United Kingdom exports nearly ten billion dollars worth of automobiles to the U.S. each year, becoming one of the first victims."

UK export data to the US

Cars are the largest export product from the UK to the US, and the White House expects this tariff policy to bring in up to $100 billion in revenue each year. The question is, who will foot the bill?

What is concerning is that Trump has repeatedly emphasized that this will become a "permanent policy," demonstrating his determination to promote the return of manufacturing. The report warns that the US stock market has not yet fully reflected long-term risks, and future volatility is likely to intensify.

The automotive industry and consumers are facing challenges together.

With the imminent implementation of policies, the automotive industry may face pressure for a restructuring, requiring automakers to accelerate the localization of the Supply Chain, while consumers may find themselves in a predicament of soaring car purchase costs. The Kobeissi Letter indicates that market volatility will significantly increase in the coming weeks, and both investors and consumers should prepare in advance.

This article discusses how the United States has sparked a storm in the automotive trade: Trump's "Liberation Day" tariffs reshape the global car market, originally published in Chain News ABMedia.