Trump's 25% auto tariffs are in effect. What investors need to know.
DETROIT — President Donald Trump’s 25% tariffs on imported vehicles to the U.S. have taken effect, but the impacts of the new levies on investors and the global automotive industry will play out over the months, if not years, to come.
DETROIT — President Donald Trump’s 25% tariffs on imported vehicles to the U.S. have taken effect, but the impacts of the new levies on investors and the global automotive industry will play out over the months, if not years, to come.
The 25% tariffs are on any vehicle not assembled in the U.S., which S&P Global Mobility reports accounted for 46% of the roughly 16 million vehicles sold domestically last year. The White House has said it also plans to place tariffs on some auto parts such as engines and transmissions, but those are set to take effect no later than May 3.
Wall Street analysts and investors have been bearish on the tariffs, which some believe could decimate company earnings and drive the automotive industry into a recession.
“A 25% on automotive imports lasting beyond four to six weeks would likely have a chilling effect on the entire sector as [automakers] need to grapple with significant impact to the bottom line,” Bernstein analyst Daniel Roeska said in a recent note to investors.
TD Cowen’s Itay Michaeli described the tariffs to investors as “close to the worst case outcome vs. recent expectations,” while Barclays’ Dan Levy said “there are no ‘winners’ in the absolute — only relative winners.”
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