Detroit's 'Big Three' car makers more exposed to Trump's tariffs than German and Japanese rivals
Donald Trump may have scored a major own goal with his tariffs on US car imports as analysts say Detroit's 'Big Three' manufacturers are more exposed than prominent German and Japanese rivals.
While the 25 per cent levy has been applied broadly as part of the President's new trade policy intended to boost domestic carmakers, some synonymous with America's automotive heritage will be impacted negatively.
Detroit’s General Motors, Ford, and Stellantis - parent group of Jeep, Dodge, Ram, and Chrysler - are particularly vulnerable, according to market analysis by automotive intelligence company Jato Dynamics.
The three manufacturers collectively sold approximately 1.85million imported cars in the US last year, accounting for 13 per cent of their combined global sales.
In comparison, Toyota, Honda, and Nissan – the three largest Japanese brands – sold 17.9million units globally last year. Of this total, 1.53million units were imported and sold within the US market, equating to just 9 per cent.
For Germany’s Volkswagen Group, BMW Group, and Mercedes Benz, US demand for their imported cars accounted for only 7 per cent of their combined global total.
'With a smaller global presence than some of their Japanese and European counterparts, US manufacturers rely heavily on domestic sales, meaning that tariffs on cars imported largely from Mexico, Canada, and Korea will be felt keenly,' Jato Dynamic's report said.
A 25 per cent import tariff on all US car imports was confirmed by Trump in his Liberation Day announced a week ago today.
The imposition of tariffs on global imports has sent the automotive industry into a frenzy over the last seven days, with the likes of Volkswagen holding cars at US ports, Jaguar Land Rover pausing deliveries across the Atlantic while it seeks to 'address the new trading terms', and JLR rival Ineos Automotive hiking
It has also forced the hand of Sir Keir Starmer to this week water down the UK government's EV sales targets in the lead up to the ban on sales of new petrol and diesel cars in 2030, with the PM stepping in to help shied British manufacturers from Trump's levies and its threat to an estimated 25,000 UK jobs.
But it has also triggered major disruption for US brands.
Last week, Stellantis announced it will furlough 900 employees and pause production in multiple factories as it worked through its tariff response.
Ford, which had a higher-than-average stock of vehicles, said it was offering employee discounts to customers.
GM also confirmed it will ramp up US-based production of its range-topping pick-ups.
Trump's decision to levy tariffs on imports is made all the more painful for the sector as it comes at a time of heightened issues for the automotive industry.
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