Car Companies Scramble to Respond to Trump's 25% Auto Tariffs

Max Carter

Max Carter

April 04, 2025 · 6 min read
Car Companies Scramble to Respond to Trump's 25% Auto Tariffs

President Donald Trump's 25% tariffs on all auto-related imports have sent shockwaves through the automotive industry, prompting car companies to scramble for a response. The tariffs, which have been called "a debacle of epic proportions," are expected to crush demand and lead to significant price hikes, with some analysts predicting increases of up to $12,000 per vehicle.

In response to the tariffs, Audi is holding all vehicles assembled in Mexico and overseas at US ports until further notice. The company has 37,000 units in dealer stock and at port that remain unaffected by the new import fees and are ready to sell. Audi spokesperson Mark Dahncke said the company is evaluating how to best proceed for its customers and dealers.

BMW, on the other hand, has not announced any specific response yet, but the company said last month that it expected a €1 billion hit to its 2025 earnings as a result of tariffs. BMW spokesperson Phil DiIanni declined to comment, aside from sending a statement highlighting the automaker's commitment to making cars in the US.

Ford was the first to respond, launching a new program called "From America, For America" that offers employee pricing to everyone. The promo runs from April 3rd through June 2nd and offers "significant savings" on a number of 2024 and 2025 gas, hybrid, plug-in hybrid, and diesel Ford and Lincoln vehicles. EV customers will get the discount on top of the Ford Power Promise deal, which extends through June 30th and includes a complimentary home charger.

General Motors responded by telling employees at its assembly plant in Fort Wayne, Indiana, that it would increase production of light-duty trucks and add some temporary hourly workers to backfill for employees during summer vacation. The company is also considering shifting some of its truck production from Mexico to the US.

Honda is planning to produce its next-generation Civic hybrid in Indiana instead of Mexico to avoid import duties. Meanwhile, Honda dealers are reassuring their customers that most of their most popular vehicles are made in the US.

Hyundai gets the award for most "Trump-appeasing" announcement, with a commitment to spend $21 billion in the US (despite most of that investment already being underway). But while Trump was happy to brandish the announcement as proof his tariffs were working, the Korean automaker was also reportedly warning its dealers that prices could go up as a result of the new import duties.

Jaguar Land Rover is holding off on any immediate decisions, telling UK-based media that its local business remains "resilient." But residents of the town where Jaguar operates its factory were dour about the news, with one resident telling The Guardian, "I'm appalled. It will kill Jaguar Land Rover here in the town."

Mercedes-Benz is reportedly considering pulling its least expensive models, like its entry-level GLA, from the US market. But no decisions have been made yet, as spokesperson Amanda Painter said that Mercedes-Benz was still "currently assessing the impact of the US-tariff lines."

Nissan initially said that it would cut a shift at the Smyrna, Tennessee, assembly plant where it makes its popular Rogue SUV once Trump's tariffs went into effect. But now that the tariffs are here, the company reversed itself, committing to keeping two shifts at the factory. Nissan is making some other hard decisions, though, pausing orders of the Infiniti QX55, which is built at its COMPAS plant in Aguascalientes, Mexico.

Porsche has never been the cheapest sports car on the block, but tariffs are likely to put renewed pressure on its prices. Last month, the company's executives told reporters that it was likely to pass the cost of tariffs along to its customers.

Stellantis, the parent company of Jeep, Dodge, Ram, Maserati, and others, has good news and bad news to share in response to the tariffs. The good news is that it's copying Ford's idea of employee price discounts to the public. The bad news is that it's temporarily laying off 900 workers while pausing production at several factories.

Tesla, which is dealing with its own problems, hasn't immediately responded to the news of the tariffs. That said, CEO Elon Musk has made several comments in response to commentary on X that Tesla is better insulated from the new fees as a result of selling only vehicles made in the US to American customers.

Toyota, the biggest automaker in the world, is keeping its cards close to its vest for now. Toyota has no immediate plans to raise prices as a result of the tariffs, both Japanese media reports and Reuters confirm.

Volkswagen is adding "import fees" to the price of imported cars sold in the US, The New York Times reported. The exact amount will be determined later this month. It was the clearest example yet of Trump's tariffs leading to higher costs for consumers.

Volvo is thinking about boosting its US-based production, including bringing new models to the factory it operates in Ridgeville, South Carolina, the company's CEO told Bloomberg. Volvo already builds the EX90 SUV and Polestar 3 at the plant in order to take advantage of the federal EV tax credit.

The automotive industry is bracing for a tough road ahead, with many analysts predicting a significant decline in sales and profits as a result of the tariffs. As the situation continues to unfold, one thing is clear: the impact of Trump's 25% auto tariffs will be felt far and wide, from car buyers to factory workers to the companies themselves.

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