As I have mentioned in this and other threads, it's all about jobs, always has been, and likely will always be.
Countries use tariffs to export their country's high-paying-jobs-unemployment problem to another.
It’s on! As our Chief Economist Jonathan Smoke feared, the “unthinkable” has happened. New automotive-specific tariffs of 25% on all imported vehicles are now in place. Finished automobiles are no longer flowing freely across North America, and key automotive free trade agreements have been...
April 4, 2025
As our team has noted before, tariffs can be effective tools to level international playing fields and grow domestic manufacturing. How they are implemented, however, matters. The size and structure of the global auto industry make rapid change difficult at best – factories take time to build, supply chains years to create, and workforces cannot be developed overnight. In the auto industry, sudden changes usually produce only one result: Chaos.
Trump indicated consumers could avoid tariffs by buying vehicles built entirely in the U.S., but industry experts say there’s not a single one with all-domestic parts and assembly.
“If you make your car in the United States, you’re going to make a lot of money,” he told NBC News in an interview Saturday. “If you don’t, you’re going to have to probably come to the United States, because if you make your car in the United States, there is no tariff.”
As to the actual tariff applied, the administration listened to automotive experts.
INCENTIVIZING DOMESTIC AUTO PRODUCTION: Today, President Donald J. Trump signed a proclamation to protect national security by incentivizing domestic
April 29, 2025
It offers an offset to a portion of tariffs for automobile parts used in U.S.-assembled vehicles equal to 3.75% of the Manufacturer’s Suggested Retail Price (MSRP) of a manufacturer’s U.S. production for the next year (April 3, 2025 to April 30, 2026), and 2.5% of U.S. production the year after (May 1, 2026 to April 30, 2027).
- These percentages reflect the duty that would be owed when a 25% duty is applied to 15% of the value of a U.S.-assembled automobile in the first year, and to 10% of the value of a U.S.-assembled automobile in the second year.
- All other automobile imports will still be subject to the 25% tariff.
- For instance, if a manufacturer builds a car in the U.S. that has 85% U.S. or USMCA content, the manufacturer effectively will not owe tariffs on that vehicle’s production for the first year.
- If a manufacturer builds a car in the U.S. that is 50% U.S. or USMCA content and 50% imported from elsewhere, then instead of paying the tariff on the full 50% of the imported car parts, the manufacturer effectively only pays on 35% for the first year.