Trump’s Tariffs Disrupt Global Auto Supply Chain (AI Translation)
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文｜财新周刊 余聪 卢羽桐 杜知航
By Caixin Weekly's Yu Cong, Lu Yutong, and Du Zhihang
“重振美国汽车业”，是唐纳德·特朗普（Donald Trump）竞选美国总统的口号之一。2024年10月，他在密歇根州底特律市演讲时放出豪言：“在本次任期结束后，全世界都将谈论‘密歇根奇迹’以及底特律的惊人重生。我希望人们在美国建造工厂、雇佣我们的员工，否则将支付关税。”
"Revitalizing the American auto industry" has been one of Donald Trump’s campaign slogans for the U.S. presidency. In October 2024, Trump delivered a bold promise during a speech in Detroit, Michigan: "By the end of this term, the whole world will be talking about the 'Michigan Miracle' and Detroit’s astonishing rebirth. I want people to build factories in America and hire our workers, or else they will pay tariffs."
美国汽车业于上世纪20年代崛起，福特汽车率先采用流水线生产模式是标志之一。流水线带动生产效率提升、成本下降，让普通美国工薪阶层也买得起汽车。底特律的汽车产业逐渐发展壮大，福特、通用和克莱斯勒形成“三巨头”，聚合产业集群。到20世纪50年代，作为全球汽车工业之都的底特律，人口超过180万，是美国第四大城市。
The rise of the American automotive industry dates back to the 1920s, with Ford Motor Company pioneering the assembly line production model as a notable milestone. The assembly line dramatically improved manufacturing efficiency and lowered costs, enabling average American wage earners to afford automobiles. Detroit’s auto industry gradually expanded, with Ford, General Motors, and Chrysler forming the “Big Three” and creating an industrial cluster. By the 1950s, Detroit had become the automobile capital of the world, its population surpassing 1.8 million and ranking as the fourth largest city in the United States.
但从上世纪70年代开始，石油危机重创美国汽车工业，丰田、大众等日本和德国车企开始快速抢占美国市场。而为了降低制造成本，车企纷纷将产能向墨西哥等地转移，美国汽车产量自此波动下滑。如今美国每年约生产1000万辆汽车，而20世纪70年代初的产能已达1300余万辆。“三巨头”在美国本土的市场份额，从20世纪70年代的超过八成，跌到2000年的六成，如今还剩下约四成。2008年全球金融危机将早已沦为“铁锈带”城市的底特律推入更深的困境，2013年因巨额债务破产。
Since the 1970s, however, the oil crisis dealt a heavy blow to the U.S. auto industry, allowing Japanese and German carmakers such as Toyota and Volkswagen to rapidly seize U.S. market share. In a bid to cut manufacturing costs, automakers increasingly shifted production capacity to countries like Mexico, causing American automobile output to fluctuate and decline. Today, the United States produces about 10 million vehicles annually, down from over 13 million in the early 1970s. The “Big Three” U.S. automakers’ domestic market share fell from over 80% in the 1970s, to 60% by 2000, and now stands at about 40%. The 2008 global financial crisis pushed Detroit—long a “Rust Belt” city—into even deeper trouble, culminating in a bankruptcy filing in 2013 due to massive debt.
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- Trump’s new 25% tariffs on imported autos and parts, effective from April-May 2025, target vehicles and suppliers from major trading partners, severely impacting global automakers and supply chains.
- The U.S. auto industry faces rising costs, declining imports, and market volatility, with estimates showing Japanese automakers alone may incur over $24 billion in tariff costs and Japanese GDP could drop by 0.2%.
- Companies shift production to the U.S. or Mexico to avoid tariffs, while global supply chains restructure, raising fears of job losses, industry chaos, and higher consumer prices.
Donald Trump’s campaign to “revitalize the American auto industry” has led to sweeping tariffs and promises of a “Michigan Miracle,” aiming to force multinational automakers to build factories and hire workers in the U.S. or pay steep tariffs. Detroit, once the world’s automobile capital, boasted over 1.8 million residents in the 1950s. However, since the 1970s, factors like the oil crisis and competition from Japanese and European carmakers caused U.S. automakers’ domestic market share to plummet from over 80% to around 40% today; Detroit even declared bankruptcy in 2013 [para. 1][para. 2][para. 3].
Upon taking office in January 2025, Trump quickly implemented auto tariffs: from April 3, all imported cars face a 25% tariff, and from May 3, another 25% hits key auto parts. Out of 16 million new vehicles projected to be sold in the U.S. in 2024, roughly half are imported, mainly from Mexico, the EU, Japan, South Korea, and Canada [para. 4][para. 5][para. 6]. Prior to 2025, import duties were just 2.5%. The sudden surge is having global consequences, with European and Japanese automakers now reconsidering their supply chains and pricing structures. Major brands like Jaguar Land Rover and Audi have halted deliveries to the U.S., and Volkswagen announced price hikes, while Nissan and Honda are shifting production to avoid tariffs [para. 7][para. 8][para. 9][para. 10][para. 11].
The European Union is deeply concerned, as the U.S. is its largest car export destination; EU automakers like BMW and Mercedes-Benz sell hundreds of thousands of cars in the American market, making it their second-largest after China [para. 12][para. 13]. Japan’s reliance on the U.S. is even greater, with 28.3% of its auto exports—amounting to roughly 6 trillion yen—sent to the U.S., supporting tens of thousands of jobs [para. 14][para. 15]. American manufacturers are also vulnerable, as Ford, GM, and Stellantis still import significant volumes; they warn tariffs may raise costs and cause disruption rather than rejuvenation [para. 16][para. 17].
China has retaliated by raising tariffs on U.S. autos and parts to 34%. Tesla, heavily reliant on both U.S. and Chinese supply chains, finds itself squeezed by tariffs, leading to production and sales woes—its share price has dropped over 40% in early 2025 [para. 18][para. 19][para. 20][para. 21]. U.S. trade groups representing automakers, suppliers, and dealerships have issued rare joint warnings that tariffs on auto parts—affecting nearly 150 categories—will drive up cost, hurt employment, and disrupt supply chains [para. 22][para. 23][para. 24].
The new tariffs have already depressed U.S. auto imports: exports from Canada and Mexico to the U.S. fell over 9% year-on-year in early 2025, EU exports dropped 12.2%, Japan 8.9%, and South Korea 7.7%. While U.S. car sales temporarily spiked in March as consumers rushed to beat price hikes, forecasts see a drop in annual sales and steep declines for foreign brands [para. 25][para. 26][para. 27]. Supply chains are rapidly restructuring, with a shift toward the U.S.-Mexico-Canada region thanks to USMCA incentives, as Chinese and European suppliers face greater risk from U.S. trade policy [para. 28][para. 29][para. 30][para. 31].
EU automakers may move production to avoid tariffs but face complex, globalized supply chains making it hard to identify U.S. or non-U.S. content for exemptions. Germany and Italy’s car exports to the U.S. risk steep declines. Meanwhile, the EU’s own tariffs on Chinese EVs and ongoing price negotiations highlight new “technology-for-market” deals and hopes for collaborative solutions, as unilateral tariffs are widely criticized [para. 32][para. 33][para. 34][para. 35][para. 36][para. 37].
For Japan, the tariffs could slash GDP by 0.2% and saddle automakers with billions in new costs, forcing production shifts to the U.S. and complicated trilateral trade maneuvers with Canada and Mexico. Despite the turmoil, Japanese companies are wary of making rapid, expensive supply chain moves, recognizing U.S. politics could change yet again by the next election cycle [para. 38][para. 39][para. 40][para. 41][para. 42][para. 43][para. 44][para. 45].
- Ford Motor Company
福特汽车 - Ford Motor Company, one of Detroit’s “Big Three,” faces major challenges under the new U.S. auto tariffs. In April, CEO Jim Farley called the tariff policy “devastating,” warning it would create unprecedented costs and chaos for the American automotive industry. Ford and other U.S. automakers rely heavily on globalized supply chains; increased tariffs raise production costs, disrupt operations, and impact their vehicles manufactured in places like Mexico or Canada for the U.S. market.
- General Motors
通用汽车 - According to the article, General Motors (GM) is one of Detroit’s “Big Three” automakers and has experienced a significant decline in its US market share, falling from over 80% in the 1970s to about 40% now. In 2024, GM sold many imported models in the US—partly produced in Mexico and Canada—which are now heavily impacted by the new 25% import tariffs imposed by the Trump administration.
- Chrysler
克莱斯勒 - Chrysler is one of Detroit’s "Big Three" automakers, alongside Ford and General Motors. The article notes that Chrysler is now part of Stellantis, a company formed in 2021 that also includes brands like Fiat and Citroën. Vehicles from Stellantis, including Chrysler, have been impacted by U.S. import tariffs, especially those produced in Mexico and Canada for the American market.
- Toyota Motor Corporation
丰田汽车 - Toyota Motor Corporation, Japan's top automaker, faces significant impact from U.S. auto tariffs. Toyota’s U.S. market exposure is high, and UBS estimates it will face 1.8 trillion yen (about $12.5 billion) in tariff costs. Toyota is considering shifting next-generation RAV4 production from Canada and Japan to the U.S. to reduce tariff exposure. The U.S. remains Toyota’s largest overseas market, and adaptation to policy changes is critical for its global strategy.
- Volkswagen
大众汽车 - Volkswagen's sales in the U.S. mostly rely on imports. In early April, Volkswagen announced price increases for several models in the U.S. market due to new tariffs. Its high-end brand Audi paused deliveries of new cars to the U.S. and may consider producing some Audi models locally to avoid tariffs. Volkswagen is currently in discussions with the U.S. government about possible solutions.
- Nissan Motor Co., Ltd.
日产汽车 - Nissan Motor Co., Ltd. is a Japanese automaker significantly affected by the new U.S. auto tariffs. To mitigate tariff impacts, Nissan announced plans to shift part of its production from Japan to the United States. The U.S. is a major market for Nissan, with 20% to 40% of sales coming from there. Japanese automakers, including Nissan, may face increased costs and reduced profits due to higher tariffs and supply chain disruptions.
- Honda Motor Co., Ltd.
本田汽车 - According to the article, Honda Motor Co., Ltd. announced plans to shift production of the Civic Hybrid from Japan to its Indiana plant in the U.S. by mid-2025 to mitigate the impact of the new 25% U.S. auto tariffs. Honda has also denied rumors of moving Canadian production to the U.S., stating its Ontario factory will continue full operations for the foreseeable future.
- Subaru
斯巴鲁 - According to the article, Subaru relies heavily on the U.S. market, with about 70% of its sales there. Due to the new U.S. automotive tariffs, Subaru, like other Japanese automakers, faces significant challenges. If Japanese car exports to the U.S. decrease substantially, related job losses could reach around 50,000. The tariffs may force Subaru to shift more production to U.S. factories to mitigate costs.
- Mazda
马自达 - Mazda, a Japanese automaker, faces significant challenges due to the new U.S. auto tariffs. The company’s U.S. market sales account for 20% to 40% of its global sales. UBS estimates Mazda, along with Honda, Nissan, and Subaru, will collectively face a 1.77 trillion yen tariff cost. The increased tariffs are expected to pressure Mazda’s profitability and could force a shift in production or market strategy.
- Tesla, Inc.
特斯拉 - Tesla, Inc. is a major U.S. electric vehicle manufacturer significantly affected by the new U.S. auto tariffs. Although Elon Musk actively supported Trump’s policies, China’s retaliatory tariffs and export restrictions on rare earths have disrupted Tesla’s supply chain and production—particularly for its humanoid robot projects. Tesla’s Model S and Model X sales in China have been suspended, and since 2025, the company’s stock price has dropped by over 40%.
- Jaguar Land Rover
捷豹路虎 - Jaguar Land Rover, a British car manufacturer, announced in late March that it would suspend delivering new cars to the US market. This decision was made in response to the US government's new 25% tariff on imported cars, as part of a broader disruption facing global automakers due to the Trump administration’s automotive trade policies.
- Audi
奥迪 - According to the article, Audi suspended deliveries of new cars to the U.S. market at the end of March 2025 in response to Trump’s 25% import tariff. Most Audi models sold in the U.S. are produced in Europe, with only the Q5 manufactured in Mexico. Audi is considering relocating part of its production to the U.S. to avoid tariffs, but the brand currently faces significant uncertainty in the U.S. market.
- BMW
宝马 - BMW sold 397,000 cars in the US in 2024, making the US its second-largest single market after China, accounting for over 15% of global sales. Although BMW has a manufacturing plant in South Carolina, many of its engines are made in Germany and imported. Due to the new US auto tariffs, BMW plans to further increase local production. The company estimates tariff-related profit losses at around 1 billion euros in 2025.
- Mercedes-Benz
奔驰 - Mercedes-Benz sells mainly EU-produced cars in the U.S., with over 15% of its global sales there—making America its second-largest market after China. The company plans to increase U.S. production and aims for 70% localization by 2027. However, increased tariffs pose risks, especially as engines and transmissions are still imported from Germany to its Alabama factory. Mercedes’ leadership calls for fair trade solutions rather than escalating tariffs.
- Stellantis
Stellantis - Stellantis, formed in 2021 and including brands such as Chrysler, Fiat, and Citroën, is often seen as an American automaker. In 2024, Stellantis sold about 1.85 million imported vehicles in the U.S., making up 13% of its global sales. Stellantis, like other American carmakers, relies heavily on global supply chains, making it vulnerable to new U.S. auto tariffs.
- Fiat
菲亚特 - According to the article, Fiat is part of Stellantis, a multinational automotive group formed in 2021 that includes brands such as Chrysler (USA), Fiat (Italy), and Citroën (France), among others. Stellantis is sometimes considered an American automaker. In 2024, Ford, GM, and Stellantis together sold around 1.85 million imported vehicles in the U.S., 13% of their global sales, and are affected by the new U.S. auto tariffs.
- Citroën
雪铁龙 - Citroën is mentioned as one of the brands under Stellantis, a multinational automotive group formed in 2021. Stellantis includes U.S. Chrysler, Italy's Fiat, France's Citroën, and over ten other brands. Stellantis is sometimes considered a U.S. carmaker, and its imported vehicles to the U.S. are affected by the new import tariffs imposed by the Trump administration.
- Polar
Polar - According to the article, Polar is a manufacturing partner of the American semiconductor company Allegro. Supported by the U.S. CHIPS Act in recent years, Polar’s production capacity in the United States has increased significantly. Allegro, whose automotive business accounts for over 70% of its revenue, maintains flexible supply chains in both China and the U.S., adapting to shifting global trade and tariff policies.
- Allegro MicroSystems
Allegro - Allegro MicroSystems is a U.S. semiconductor company with production lines in both China and the U.S., allowing for flexible supply chains. Automotive business accounts for over 70% of its revenue. Supported by the U.S. CHIPS Act, its U.S. manufacturing partner Polar has significantly increased capacity in recent years. Amid shifting supply chains, Allegro remains focused on customer needs and maintains close communication with clients, while considering tariff exemption options.
- Cox Automotive
Cox Automotive - Cox Automotive, headquartered in Atlanta, is the world’s largest automotive services and technology provider. According to the article, its statistics showed that U.S. new car sales in March 2025 reached nearly 1.56 million, higher than forecast, partly because consumers rushed to buy before tariffs raised prices. Cox Automotive predicts that after the tariff shock, new car prices in the U.S. will significantly rise and annual sales could fall to 15.6 million vehicles.
- AlixPartners
艾睿铂 - According to the article, AlixPartners is a consulting firm. ZHANG Yichao (章一超), a partner at AlixPartners, told Caixin that China’s automotive parts exports to the US mainly consist of low value-added items like traditional transmission parts and bearings, and the new tariffs may spur Chinese exporters to move up the value chain.
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