The tariffs on automobiles and auto parts announced by President Trump on Wednesday will have a widespread impact on U.S. and overseas automakers.
However, there are important differences based on the situation of each company.
Tesla
The company, run by Trump's best friend Elon Musk, sells cars for sale in the US at its California and Texas plants. As a result, it is probably the least exposed to customs duties.
However, the company purchases parts from other countries. According to the National Highway Traffic Safety Administration, approximately one-quarter of the value of a car comes from overseas.
Additionally, Tesla is struggling to lower sales around the world as Musk's political activities and statements have turned off moderate, liberal car buyers. In some countries, targeting Tesla can call for retaliation against Trump's tariffs. Several Canadian provinces have already stopped offering incentives for the purchase of Tesla electric vehicles.
General Motors
The largest American automaker imports many of the bestsellers and most profitable cars and trucks, particularly from Mexico, where there are several large factories that produce models like the Chevrolet Silverado. About 40% of GM's sales in the US last year were vehicles assembled overseas. This could make the company vulnerable to tariffs.
However, unlike some other automakers, GM has recorded strong profits in recent years and is considered by analysts to be in a good financial position. It will help to exacerbate tariffs more than other companies, especially when taxes are removed or diluted by Trump.
Ford Motor
Ford is less dependent on imported cars than many of its rivals. It earns around 80% of vehicles sold in the US. As a result, it is relatively insulated from the 25% tariffs on imported vehicles.
However, the company still relies on foreign factories for major parts such as engines. For example, Ford Factory in Ontario manufactures engines for some of its pickup trucks. Ford has lost billions of dollars in electric vehicles. One of three battery-powered models, the Mustang Mach-E is produced at a factory near Mexico City.
Created by the 2021 merger of Fiat Chrysler and Peugeot, Stellantis is also struggling with a slump in sales and is looking for a new CEO. These challenges put the company at greater risk, along with others like Nissan, especially if tariffs remain in place for months or years.
Toyota
Like other Japanese automakers, Toyota is highly dependent on the US, selling 2.3 million cars last year. Approximately one million of these vehicles are made in other countries, many of which are made in Canada, Mexico and Japan. That could be a major problem for companies and automakers like Subaru and Mazda, where Toyota works closely.
However, Toyota, the world's largest automaker, is in a better position than other automakers. Analysts consider it be beneficial to be one of the best companies in the global automotive industry.
Volkswagen
Europe's largest automakers have only one factory in the US and one factory in Chattanooga, Tennessee, which means they could actually get injured. They import many cars, including Mexican Odis, Volkswagen, and German Porsche.
The company has been struggling financially in recent years. This is because its sales are declining sharply in China, and it is growing rapidly as domestic automakers introduce affordable electric vehicles and hybrid vehicles. While Volkswagen wanted to invade in the US, Trump's latest tariffs could make that difficult task even more difficult.
Hyundai and Kia
The Korean stable has been producing an impressive increase in sales in the US in recent years. Companies are also investing in new electric car plants in Georgia and are beginning to increase production, which will help avoid tariffs on some models.
On Monday, Hyundai executive chair Euisun Chung announced that his company will invest another $21 billion in the US, including a new steel factory in Louisiana, along with Trump at the White House. Hyundai and Kia currently have three factories in Georgia and Alabama, but they cannot avoid tariffs on hundreds of thousands of cars imported into the US. Many of these vehicles come from South Korea and negotiated a trade agreement with the US in 2007, renewed during Trump's first term.
