Trump’s Tarrif on Auto Industry: US President Donald Trump has announced a 25 percent recipe (mutual) tariff on all foreign -made automobiles (cars, bikes). Trump argued that, the United States has been in loss in global trade for decades. He claimed that this step will give a new life to the American manufacturing sector and will help to recover the untouchable international trade.
Trump said during his speech from the White House Rose Garden, “For decades, our country was looted by both near and distant countries, friends and enemies.” He blamed the previous American leaders for allowing such business inequalities to continue. Trump called this new tariff plan the most appropriate for global trade.
Pointing to the deficiencies in the global tariff infra, Trump said that the US imposes only 2.4 percent tariffs on motorcycles, while other countries impose more tariffs than this. He said, “Thailand and other countries are charging a lot of prices – such as 60 percent. India imposes 70 percent tariffs. Vietnam imposes 75 percent tariffs, and other countries impose more tariffs.”
Donald Trump said about the differences of the global automobile industry that, “Aaj To date, the United States has imposed 2.5 percent tariff on foreign -made automobiles for decades. The European Union takes more than 10 percent tariffs from us, and they also have 20 percent VAT. Which is very high.” Trump described this new tariff plan as very important for the American manufacturing sector.
What is involved in Trump’s tariff …
According to Rairts, the import of vehicles and auto parts worth more than $ 460 billion annually from Trump’s 25% auto tariff will be covered. This auto tariff plan of Trump will affect about 150 auto parts category. Who will face tariffs from May 3. The new tariff includes many components including car, light truck, engine, transmission, lithium-ion battery, tire, shock absorber and spark plug wire.
This list also includes automotive computers under the tariff code, including all computer products including laptops and desktop computers and disc drives. According to data from the US Census Bureau, in 2024, the category was imported $ 138.5 billion. Except for this category, the import of total American vehicles and parts was $ 459.6 billion.
Effect on these companies …
This new tariff plan of Donald Trump is affecting the auto sector around the world. This tariff will affect the auto industry of Japan, Korea and Germany the most. Because here all the legendary car companies like Toyota, Mercedes Benz, BMW, Hyundai and Volkswagen export their vehicles to the US. But it is important to understand how much effect it will have on Indian companies.
Some Indian companies like Tata Motors, Mahindra and Eicher Motors may affect this tariff. Because in the US, there is a lot of demand for Royal Enfield of Jaguar Landrover and Eicher Motors owned by Tata Motors. But it is also important to see here that most of the JLR cars sold in the US are either manufactured in the UK or in Europe. Therefore, these vehicles are not exported directly from India to America. Although the company is owned by Tata Motors, then the sale of vehicles is affected, then it will definitely affect the revenue of the company.
Apart from this, Mahindra also sells his vehicles in parts of America. In the year 2023, India had exported motor vehicles worth $ 37.14 million to the US. India has so far been charging more than 100 percent fees on vehicles coming from abroad. Due to this tariff, the sales of companies can decrease due to the expensive vehicles exporting from India to America. However, experts believe that the effect of tariff will be more on the companies making auto components.
Strong impact on component makers …
Many Indian auto parts export to America. In such a situation, this new tariff can prove harmful for them. If we look at the figures, in the financial year 2024, auto parts worth $ 6.79 billion were exported to the US from India. Whereas Components worth $ 1.4 billion were imported on 15% duty from America. Earlier, America used to impose zero tariffs on Indian auto parts, but now this policy has changed and it will have a direct impact on auto parts manufacturers. Samarvardhana is a major auto parts manufacturer in the country, which exports to the US on a large scale. Apart from this, companies like Sona BLW will also be affected by this.