The Automotive Update: Trump tariff to take effect worldwide
28 March 2025
US President Donald Trump confirms a 25% vehicle import tariff, carmakers make production gains, and Changan expands its European presence. Autovista24 journalist Tom Hooker explores the week’s biggest automotive news stories in The Automotive Update podcast.
Which carmakers will be hit hardest by Trump’s automotive import tariffs? How has Europe reacted? Which carmaker is starting production of a much-anticipated future model direction? These questions are answered in the latest edition of The Automotive Update.
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Major automotive tariff announced
US President Donald Trump announced a 25% tariff on all cars and light-commercial vehicles imported into the country. This additional duty will come into effect on 3 April 2025, as reported by Reuters. It will act in addition to the base tariff rate of 2.5% for automotive imports.
The 25% duties will also apply to engines and engine parts, transmissions and powertrain components, as well as electrical parts. These tariffs could be implemented up to a month later, however, this will be no later than 3 May.
Volvo, Audi, and Mercedes-Benz stated they will relocate parts of their production, according to Reuters. Other companies have stated they intend to raise prices. Domestic manufacturers, such as General Motors and Ford, could also be impacted.
These tariffs could unsettle the global supply chain, raise list prices, create consumer uncertainty, and lead to potential job losses. The news resulted in most automotive stocks falling. On Thursday afternoon, General Motors and Ford suffered 7% and 3% share slumps respectively. However, Tesla’s stock grew by around 5%, Reuters stated.
Tariff backlash
The news has been met with a significant backlash from global leaders, carmakers, and industry bodies.
EU Commission President Ursula Von Der Leyen said: ‘The automotive industry is a driver of innovation, competitiveness, and high-quality jobs, through deeply integrated supply chains on both sides of the Atlantic. As I have said before, tariffs are taxes are bad for businesses, worse for consumers equally in the US and the European Union.’
Robert Habeck, Germany’s economy minister, stated ‘what counts now is to have a firm response to these tariffs from the EU’ and that ‘it needs to be clear that we will not take this lying down.’
Meanwhile, French President Emmanuel Macron highlighted that ‘Trump asked Europe to spend more on defence, so it is not coherent to impose tariffs on us.’ The UK’s chancellor of the exchequer, Rachel Reeves, commented ‘trade wars are no good for anyone’. Canadian Prime Minister Mark Carney said ‘we will defend our workers, we will defend our companies, we will defend our country, and we will defend it together.’
Carmakers’ tariff reaction
Volkswagen stressed that ‘the entire automotive industry, global supply chains and companies, as well as customers, will have to bear the negative consequences.’ BMW stated that ‘both sides should therefore promptly find a transatlantic deal that creates growth and prevents a spiral of isolation and trade barriers.’
ACEA’s director general, Sigrid de Vries, urged the US to consider the negative impact of tariffs, not only on global carmakers but on domestic manufacturing as well.
In Germany, the VDA said the tariffs are a fatal signal for free and rules-based trade. In the UK, SMMT chief executive Mike Hawes commented that the ‘announcement by President Trump is not surprising but disappointing if, as seems likely, additional tariffs are to apply to UK-made cars.’
Major new production facilities
Hyundai Motor Group’s Metaplant America opened its doors this week. The vehicle assembly and battery production plant is the main focus of the OEM’s $12.6 billion (€11.6 billion) investment in Georgia.
It will produce up to 500,000 Hyundai, Kia and Genesis electric and hybrid vehicles each year. The group has also committed an additional investment of $21 billion over the next four years.
BMW has begun production of its Neue Klasse in Debrecen, Hungary. The first model of the new generation, the iX3, has been produced as a test vehicle at the site since November 2024. Processes and systems can now be optimised for around six months before the switch from pre-series to series production.
BMW says the Neue Klasse opens up new possibilities in vehicle assembly. This includes ‘more efficiency thanks to modularisation and fewer different connecting elements.’
Changan to enter Europe
Electric vehicle (EV) manufacturer Changan has announced plans to enter 10 European markets in 2025, as revealed by Reuters. The Chinese carmaker showcased its Deepal S07, an electric SUV that starts at €45,000 at an event in Germany this week.
The model is the brand’s first model designed specifically for the European market. Changan said it will launch the SUV Deepal S07 in Norway, Denmark, Germany and the Netherlands from April. The UK will see the launch in June as well as additional markets.
The manufacturer said its Deepal S05 model will also launch later this year, followed by the Changan E07 by early 2026. Changan added that it also plans to sell hybrid cars in Europe from 2026. Additional plans include a European sales and services network, with more than 1,000 dealerships. Vehicles sold in Europe will come from its production plants in China and Thailand.
