How Trump’s trade war could hit automakers in the U.S.

Over the past three decades, the global auto industry has gotten, well, more global. Manufacturers built scores of factories outside their home countries to reduce exposure to currency swings, take advantage of cheaper labor and manufacture cars closer to buyers.

BMW AG makes crossovers in South Carolina. Toyota Motor Corp. produces sedans in Kentucky. General Motors manufactures pickups in Mexico. Hyundai Motor Co. builds crossovers in the Czech Republic. And almost everyone is producing more of almost everything in China.

While cars are typically sold in the countries where they’re made, it’s not uncommon for them to also be shipped abroad. BMW, for instance, is America’s top auto exporter, sending some $10 billion worth of vehicles including the X5 crossover to other nations last year.

This system is under threat as President Donald Trump embarks on trade wars he’s described as easy to win.

Cars are significant contributors to deficits he’s repeatedly said are “very unfair” to the U.S., with Germany coming under particularly heavy criticism. But after months of tough talk and threats, the first country whose autos Trump is targeting with tariffs is one the U.S. actually has a surplus with: China.

Cars were among the products that made the list of $50 billion in Chinese goods that the U.S. plans to slap with 25 percent levies early next month. In response, China has said it will tax American merchandise — including autos — with the “same scale and intensity.”

Weeks before the tariffs are even supposed to be implemented, their first high-profile victim has already stepped forward. Daimler AG said Wednesday that profit will suffer as exports from its Alabama factory to China will likely will be lower than the 60,000 vehicles it had expected this year.

The risk for the global auto industry is that this may be merely an opening salvo in a battle by the Trump administration against cars shipped to American shores. The Commerce Department is looking into whether vehicle imports pose a national security threat, and tariffs of as much as 25 percent are said to be under consideration.

Here’s an in-depth look at the top models automakers imported to the U.S. last year, from the countries that sent America more cars than anywhere else:


Hitting vehicles assembled in Mexico with tariffs would deal a significant blow to a segment that might surprise American consumers: Detroit-branded pickup trucks.

Last year, two of the top-selling models imported from the country were GM’s Chevrolet Silverado and heavy-duty versions of Fiat Chrysler Automobiles’ Ram pickups. While Trump has touted Fiat Chrysler’s plans to shift production from Mexico, that’s not happening until 2020.

GM is about to add to the flow of Mexican imports by bringing back the Blazer and building the crossover it at the company’s plant in Ramos Arizpe.


Japan’s Toyota and Honda Motor Co. would be hit hardest if the U.S. decides to tax autos built by its neighbor to the north. But GM and FCA wouldn’t be spared harm.

The Toyota RAV4, Honda CR-V and Chevrolet Equinox are among the top-selling models in America’s booming crossover segment.


For decades, Japan’s imports of fuel-efficient small cars chipped away at the Detroit Three’s market share. Nowadays, the country’s automakers are sending over hundreds of thousands of hot-selling compact crossovers.

Aside from pickups, the Toyota RAV4 was the top model in America last year.

South Korea

Hyundai Motor Co. and Kia Motors Corp.’s plants in Alabama and Georgia insulate the companies somewhat from tariffs, but more than half of the vehicles they sold in the U.S. last year were shipped from their home market, according to LMC Automotive.

GM also builds Buick and Chevrolet models in the East Asian nation and sends them to America.


While Germany imported the fifth-most vehicles into the U.S. last year, the home of Europe’s biggest economy punches above its weight in attracting Trump’s ire.

The president has openly lamented the number of Mercedes-Benz logos he sees prowling Fifth Avenue and criticized Germany this week for snubbing American-made Ford vehicles.

For more data and charts from Bloomberg, click here.

4 thoughts on “How Trump’s trade war could hit automakers in the U.S.

  • I have been in the Automotive field for 39 years and the trade imbalance has effect all are goods going into other Countries like Mexico, Canada, where there these countries tariff us as much as 200% for our goods and we sit back and do nothing. With every achievement there is some pain, until both parties suffer some . This could be a good starting point, with any bargaining negotiations and there is always some pain for both parties involved , but that how progress is made! I would like to see Zero Tariffs on all countries going forward for the future ! This way everyone wins and all parties involved prosper ! U.S.A. has been pushed around long enough and every other President to now has kicked the can down the road ! America wants equal fair TRADE!

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