According to a recent report by the Center for Automotive Research (CAR) in Michigan, the 25% auto tariffs enacted by President Donald Trump are expected to increase costs for U.S. automakers by approximately $108 billion by 2025.
The study analyzed that the three largest automakers in the U.S., Ford, General Motors, and Stellantis, will incur an increase in costs of $42 billion. The average tariff cost per vehicle for imported parts used in vehicles produced in the U.S. by the three largest automakers is $4,911, which is higher than the industry average of $4,239. For imported vehicles, the industry average tariff cost per vehicle is expected to be $8,722, while the three largest automakers are expected to incur $8,641.
In addition, vehicles produced in Mexico and Canada will be exempt from tariffs for the time being under the United States-Mexico-Canada Agreement (USMCA).
In response to the tariffs, General Motors has expanded truck production at its Indiana plant, while Stellantis has temporarily halted production at its plants in Mexico and Canada.
The American Automotive Policy Council stated that the investigation demonstrated how the 25% auto tariff imposes substantial costs on the industry, and noted that the three companies are willing to continue discussions with the government to expand their vehicle production in the United States.
