The world economy is entering yet another tense period. President Donald Trump has signed a controversial executive order that dramatically changes the rules of international trade in the automotive industry. His decision to impose a 25% tariff on car imports from outside the United States is causing widespread debate and concern among the world’s leading manufacturers.
This unilateral trade measure is a continuation of Trump’s long-term “America First” strategy. The administration justifies the move by seeking to protect domestic industry and bring manufacturing capacity back to the US. However, experts warn that the consequences may be more complex than they initially appear. In fact, the new tariffs will not only target finished cars, but will gradually extend to key automotive components, which could fundamentally disrupt global supply chains.
Traditional global producers will be most affected. Toyota, BMW, Mercedes-Benz, Stellantis and other leading automakers will feel the direct impact of these trade restrictions. Equity markets are already reacting to this, with the MSCI World Automotive Index down 22% this year, clearly showing investor nervousness.
Impact on the automotive industry
The new tarifs will affect the world’s leading automakers, including:
- Toyota Motor Corp.
- BMW
- Mercedes-Benz
- Stellantis
- Hyundai
Reactions of international partners
European Union
European Commission President Ursula von der Leyen announced that the EU intends to defend its economic interests and seek a diplomatic solution. The EU is considering strong countermeasures that could significantly affect US interests in Europe.
Canada
Prime Minister Mark Carney called the tariffs a “direct attack” on the car industry and promised reciprocal measures. The Canadian government is prepared to respond to US trade moves in a targeted manner.
Japan and South Korea
Both countries are considering countermeasures to protect their automotive sector. Local governments are working hard on strategies to minimise the economic impact.
Economic impact
Analysts estimate that the new tariffs may:
- Increase the price of a new car by up to $4,000
- Threaten existing supply chains
- Complicate production in North America
Key dates
- Effective date of tariffs: from 3 April 2025
- Extension to automotive components: until 3 May 2025
- Other trade measures: planned for 2 April 2025
Trump’s trade war is thus entering another, more intense phase that could fundamentally reshape the global car market.
