How automakers are responding to Trump's import tariffs
What's the story
The recent imposition of a 25% tariff on imported vehicles by the Trump administration has prompted significant responses from global automakers. Audi, the luxury division of Volkswagen, has decided to halt all vehicle imports to the US. Jaguar Land Rover has also suspended shipments to the US. Analysts anticipate that consumers may experience higher vehicle prices, leading some buyers to expedite their purchases to avoid potential increases
Impact
Audi's response to the new tariffs
Audi has started holding cars at ports and is reportedly halting all US imports from Mexico and overseas factories. Vehicles that arrived after April 2 are being held at US ports as the company assesses the impact of the new tariffs. Currently, Audi has approximately 37,000 vehicles in US inventory, sufficient for about two months of sales. After that, the company plans to distribute port-held vehicles to dealers with increased prices to cover additional fees imposed by the Trump government.
Tariff adaptations
Volkswagen and other automakers respond to tariffs
Volkswagen, another automotive giant, is also halting all US imports, German outlet Zeit Online reported. Cars already in the US will be charged an additional fee on their destination charge. BMW has said it will absorb import fees until May 1 for its Mexico-imported models. Stellantis halted production at its Canadian plant for two weeks over these tariffs and laid off 900 workers last week.
Price adjustments
Ferrari raises prices in response to new tariffs
Ferrari was one of the first automakers to respond to the new tariffs by increasing prices on its priciest cars such as the Purosangue SUV and 12Cilindri grand tourer. Reportedly, General Motors is ramping up its full-size truck production in Fort Wayne, Indiana, as a strategy to counter tariffs on trucks imported from Canada and Mexico. Ford is offering employee pricing through June 2 for most 2024-2025 models excluding certain US-built ones.
Tariff strategies
Hyundai, Genesis, Kia and Honda's response to tariffs
Hyundai and Genesis have announced they won't hike prices due to tariffs for at least two months but will no longer offer two-year complimentary maintenance on new models. Kia hasn't made a formal announcement yet as several popular models it sells are produced in the US. Honda has also not announced any price changes yet.