The duties proposed by the president would hit many automakers. In addition to taxes on models imported from Europe and Asia, those that may apply to vehicles produced in Mexico should be carefully observed
The most awaited day in the United States, and beyond, has arrived. The second term of office officially begins on 20 January 2025 Donald Trump as American president. Four years that promise to be of strong change for the country of stars and stripes, if we consider what the Republican exponent promised in the election campaign. Changes that will affect the internal balance of the world’s leading power and beyond. Indeed, among the central points of Trump’s program is a protectionist economic policywhich will consequently also affect the rest of the world map. And which will inevitably also concern the automotive sector. The auto industry is crucial to the American economyrepresents one of the production drivers of the country. And also from a cultural point of view, what concerns the car and the industry around it is of great interest to US citizens. The protectionist measures promised by Trump, if implemented, will have the aim of pushing large automotive groups to produce more and more on American soil. So let’s find out what the duties mentioned by the president are, which countries they would hit and above all what effects they could have on European and Asian homes.
what duties and for whom
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During the election campaign Trump declared that he wanted to impose a general duty of 10% (on some occasions 20%) for imports. This, of course, would also concern the automotive industry. Furthermore, some countries would be subject to even more taxes than others. Among these is China, for which there has been talk of duties at 60% (there is already one of 100% on electric car imports) and neighboring Mexico and Canada. To import products from his American “neighbors”, the president would like to impose an additional tax of 25%.
European and Asian houses, the Mexican question
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Therefore, if Trump were to implement what he promised during the election campaign, to import cars from Europe, Japan and South Korea you would have to pay a 10% duty. An in-depth discussion, however, must also be made on what the president proposed regarding Mexico. In the country, in fact, there are factories of car manufacturers from all over the world: European (Mercedes, BMW, Audi and more), Asian (Nissan, Kia), as well as major American brands (including GM and Ford) . The reason for this concentration? Quite intuitive: produce near the USA at lower prices and then export your models to American soil with low transport costs. This is precisely what Trump wants to avoid, in the automotive field and beyond. By hitting neighboring countries with higher tariffs, the White House would push manufacturers to move production sites to the United States. A situation that will certainly be monitored by the various houses.
the situation in China
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The situation is different for Chinese houses. The United States, already with the Biden administration, has implemented a series of measures aimed at countering Beijing’s competition in the automotive sector. In addition to the aforementioned 100% duty for imports of electric cars produced in the People’s Republic, the Commerce Department banned cars with software and hardware made in China starting in model year 2027 for the former and from that 2029 for the latter. However, the Trump administration’s response to a possible proposal from Chinese companies to open factories in the United States should be evaluated. The ban, in fact, was justified for reasons related to national security. However, if the production sites were to be located in the USA, and could therefore be monitored by local authorities, an opening could not be ruled out regardless.
the dollar “problem”.
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The tariff policy proposed by Trump could encounter some obstacles immediately. “Responsible”, paradoxically, would indirectly be the American president himself. In fact, the markets reacted well to his election, with the dollar strengthening more than competing currencies. A phenomenon which, if it were to continue, could at least cushion the effect of the duties themselves for importers: by buying with a stronger currency, in fact, the weight of the tax applied to the product being imported is proportionately reduced. It is still too early to see what countermeasures the American president will implement in this regard. For the moment, houses will watch Trump’s first moves with the utmost attention. In the meantime, it remains to be understood which duties will arrive and to what extent: will the president keep what he promised or will he surprise companies with higher (or lower) taxes compared to what was declared?
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