A Detailed Look at Trump's Car Tariffs

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Thanks for reading! If you haven’t subscribed, please click the button below:Subscribe nowBy subscribing, you’ll join over 65,000 people who read Apricitas weekly!In any other administration, the announcement of 25% tariffs on cars & parts would be the single-largest economic story of the year—they currently hit more than $353B in US imports, having a larger economic effect than all of the tariffs implemented during Trump’s first term combined. These tariffs primarily affect imports from close American allies like the EU, Japan, & South Korea, who supply the majority of foreign-made cars to the United States. Yet the President won’t even spare the highly integrated North American supply chain, as tariffs currently apply to the non-US content in Mexican and Canadian-made vehicles. Tariffs will also eventually be applied to the non-US content in Mexican/Canadian-made parts, which would increase the amount of imports affected by tariffs by another $68B when implemented. Plus, the Trump administration is looking to expand the trade war even further with tariffs on foreign-made heavy trucks and their parts, which could increase the amount of affected vehicle imports by roughly another $20B.All of this was implemented in the maximally chaotic Trumpian way—only days before the tariffs on car parts were set to go into effect, the White House announced that they would not “stack” with other existing tariffs on steel, aluminum, China, or non-USMCA-compliant Canadian/Mexican goods. A steel car part from China could have faced additional tariffs of 70% (25% for being a car part, 25% fo…