Recently imported brand new unregistered Honda cars are parked in a storage yard at the Port of Bristol on January 15, 2025 near Bristol, England.
Anna Barclay | Getty Images
Shares of Asia’s automakers fell after U.S. President Donald Trump announced he will impose tariffs on cars not made in the country.
Japanese automakers Toyota and Honda fell 3.69% and 2.91% respectively. Nissan, which has two plants in Mexico, declined 2.92%, and Mazda Motor lost over 6%. Mitsubishi Motor fell 4.9%.
South Korea’s Kia Motors, which has a manufacturing plant in Mexico, dipped 2.76%. Shares of Chinese automakers Nio and Xpeng fell 3.94% and 1.97% respectively.
These new tariffs will go into effect April 2. White House aide Will Scharf explained that the tariffs will apply to “foreign-made cars and light trucks,” in addition to existing duties.
The full details of the proclamation remain unclear, as most cars consist of parts from various countries.
These tariffs are also expected to bring in over $100 billion of new annual revenue to the U.S., Scharf estimated.
“Every automaker that sells vehicles in the U.S. depends on global supply chains for automotive parts, with many of them coming from China,” said Karl Brauer, executive analyst at iSeeCars.
“That means even if Honda or Toyota assembles a model in the U.S., the parts that come from China will raise the cost of producing those vehicles,” he told via email, adding that these costs will either reduce an automaker’s profit or be passed on to consumers in the form of higher price.
Vehicles assembled in the U.S. will also be impacted, though at a lower level, based on the makeup of its foreign parts, said the analyst.
“No U.S. automotive retailer will escape the impact of these tariffs,” said Brauer.
European Commission President Ursula von der Leyen criticized the tariffs on social media platform X and affirmed that the European Union will continue seeking negotiated solutions “while safeguarding its economic interests.”
“The fact that it’s a signed executive order makes it a little stronger than we thought it would be,” said Joseph McCabe, CEO and President of AutoForecast Solutions.
“Rolling it back before April 2 doesn’t seem to be likely. This is going to be in effect for most likely a couple weeks if not a month, and then we’re going to see some some devastation in that time frame,” he added.
