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On March 27, 2025, vehicles lined up at a port in Yokohama, Japan, highlighting the global nature of the automotive industry. Recent developments surrounding U.S. tariffs on automobiles and parts have caused anxiety for investors, particularly affecting Asian auto stocks for a second consecutive day.
Major Japanese automakers have seen significant declines. Toyota and Honda experienced drops of 4.29% and 4.24%, respectively, on Friday. Nissan, which operates three manufacturing facilities in Mexico, saw a 1.63% decrease in its stock. Other notable declines included Mazda Motor, which fell by 3.99%, and Mitsubishi Motor with a 1.27% drop.
Furthermore, South Korean manufacturer Kia Motors, which also has a plant in Mexico, witnessed a 2.66% decline. Hyundai Motor was not spared either, with its stock falling by 3.53%.
The tariffs, set to take effect on April 2, will impact imported passenger vehicles and light trucks, alongside key components such as engines and transmissions, according to a statement from the White House.
Analysts predict that these tariffs will impose significant cost increases on U.S. consumers, with estimates suggesting hikes of $5,000 to $15,000 on imported vehicles. Additionally, locally manufactured cars could see price increases of up to $8,000, according to insights from Goldman Sachs analyst Mark Delaney.
The economic ramifications are profound, as over 90% of U.S. motor vehicle imports originate from five key trading partners: the European Union, Canada, Mexico, South Korea, and Japan, as reported by ANZ. This dependency raises concerns about escalating tensions, particularly as the EU, Canada, and other countries indicate their willingness to retaliate against U.S. tariffs, potentially leading to what analysts warn could become a protracted trade dispute.
President Trump has issued threats of “far larger” tariffs should Canada and the EU collaborate to counter U.S. trade measures, suggesting that tensions may escalate further.
The task of enforcing these tariffs is complicated by the need to define a clear process for applying duties on auto parts. The political consultancy Eurasia Group noted that importers covered by the United States-Mexico-Canada Agreement (USMCA) will have the opportunity to certify the domestic content of their vehicles to avoid excessive tariffs. The White House elaborated that a 25% tariff would only apply to the non-U.S. components of automobiles.
According to Eurasia Group, the 25% tariff on USMCA-eligible auto parts will remain on hold until the Commerce Secretary, in coordination with Customs and Border Protection (CBP), establishes a method to calculate tariffs based exclusively on the non-U.S. content.
—CNBC’s Kevin Breuninger contributed to this report.
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