US PRESIDENT Donald Trump on Wednesday said, he was placing 25 per cent tariffs on auto imports, a move the White House claims would foster domestic manufacturing but could also put a financial squeeze on automakers that depend on global supply chains. “This will continue to spur growth. We’ll effectively be charging a 25 per cent tariff,” Trump told reporters. The tariffs, which the White House expects to raise USD 100 billion in revenue annually, could be complicated as even US automakers source their components from around the world.

 

The tax hike starting Aprilmeansautomakerscould face higher costs and lower sales, though Trump argues thatthetariffswillleadtomore factoriesopeningintheUnited States and the end of what he judgestobea“ridiculous”supply chain in which auto parts and finished vehicles are manufactured across the United States, Canada and Mexico. To underscore his seriousness aboutthe tariffsdirective he signed, Trump said, “This is permanent.”

 

Shares in General Motors fell roughly 3 per cent in Wednesday trading.Ford’s stockwasupslightly.SharesinStellantis,theowner of Jeep and Chrysler, dropped nearly 3.6 per cent. Trump has long said, tariffs againstauto importswouldbe a defining policy of his presidency, betting that the costs created by the taxes would causemoreproductiontorelocate totheUnitedStateswhile helping narrow the budget deficit. “We’relookingatmuchhigher vehicle prices,” said economist Mary Lovely, senior fellow at the PIIE 

 

 

US PRESIDENT Donald Trump’s decision to slap a 25 per cent tariff on all auto imports has cast uncertainty over India’s nearly USD 7 billion of exports to America, which industry fears could squeeze margins. Automobiles and car parts imported to the US would face a 25 per cent tariff starting from April 2. While India is not a big exporter of cars to the US, Tata Motors’ luxury car subsidiary Jaguar Land Rover (J LR) is deeply entrenched in the American market. About 23 per cent of JLR’s over 4,00,000 units sold in FY24 were in the US. These were all exported from its UK plants. Indian auto ancillary firms will see the biggest hit as they export a lot of components to the US. Sona BLW Precision Forgings, Bharat Forge, and Samvardhana Motherson International Limited (SAMIL) will be vulnerable to the tariff blow.