Trump tariff rampage tanks car giants

Tesla is a big winner, while traditional rivals have been torched by President Trump’s new car tax.

America’s General Motors has been smashed by automotive industry tariffs designed to protect the US car industry.

A 25 per cent import duty set to apply to cars built outside the US from April 2 reduced share prices for all of Detroit’s “big three” manufacturers - Ford, Chrysler (now Stellantis) and General Motors.

GM was hit hardest, recording a reduction in share price of more than 10 per cent this week.

General Motors’ share price dropped from $52.59 USD on Tuesday to $47.20 USD on Thursday, reducing its overall value by $5.34 billion USD ($8.4b).

MORE: Musk’s desperate move to save Tesla

Chevrolet has been burnt by harsh taxes on the car industry in the US.

Around half the cars sold by GM in the US are made in America, with many others sourced from Mexico and Canada - including some versions of the Chevrolet Silverado pickup.

Canadian Prime Minister Mark Carney said the extraordinary tariffs were a “direct attack” on his country’s economy.

When announcing the taxes, US President Donald Trump said they would help “spur growth that you’ve never seen before”.

The tariffs apply to vehicle components as well as completed cars.

Goldman Sachs analysts estimate the import duties will drive up prices by $3000 to $8000 on locally made cars, and $5000 to $15,000 on imported vehicles.

Tesla has emerged as one of the winners from the new policy.

MORE: Nissan guns for Tesla in comeback

Some examples of Chevrolet’s Silverado are made outside the US.

While chief executive Elon Musk insists the impact of tariffs on Tesla will be “significant”, economic analysts at Bernstein believe Tesla is “the clear structural winner” benefiting from Trump’s changes.

The 47th President’s American First slogan was a key part of his re-election campaign and he has largely followed through with most of his campaign promises, including levying tariffs on US imports in a bid to protect domestic American industries.

Australia is doing its best not to get caught up in Trump’s tariff web but it seems it’s already too late for several of the world’s biggest carmakers.

On Thursday, Trump signed an executive order implementing 25 per cent tariffs on imported cars.

MORE: The new EV giant gunning for Tesla

US President Donald Trump signing an executive order announcing tariffs on auto imports. (Photo by Mandel NGAN / AFP)

“This is about making America great again, making it strong and prosperous again,” Trump said during the signing.

“We are going to have very strong policing. And it’s very easy to do. If parts are made in America and the car isn’t, those parts are not going to be taxed or tariffed.

“For the most part I think it is going to lead to cars being made in one location.”

Trump has previously said he would like to revive Detroit’s role as one of the world’s biggest maker of cars and car parts.

Asian automakers were hit hard by the news, with Japanese giant Toyota’s shares sinking 3.69 per cent on the news. Honda shares slumped 2.91 per cent, while Nissan which has Mexican plants that Trump is targeting saw their share price falls 2.29 per cent.

It was even worse news for Mazda, whose share price lost over 6 per cent and for Mitsubishi who saw their share value drop 4.9 per cent.

The news wasn’t much better in South Korea, with Kia, who also has a plant in Mexico, seeing their share price fall 2.76 per cent.

Nissan’s share price slumped on the news. Picture: Supplied

The share price of Chinese carmaker Nio fell 3.94 per cent and Xpend dropped 3.94 per cent.

Toyota, Honda and Nissan all boasted cars that were among the top 10 most popular in the US in 2024.

However, given the 25 per cent price rise that is unlikely to continue.

The move is expected to raise around $100bn in annual revenue.

“The foreign trade cheaters have turned America into a lower-wage assembly operation for foreign parts that threatens our national security because it’s eroded our defence and manufacturing industrial base,” said White House trade adviser Peter Navarro.

“Half of the roughly 16 million cars, SUVs and light trucks Americans bought in 2024 were imports — that’s 50 per cent.

Toyota sells more cars in the US than any other foreign company. (Photo by Kazuhiro NOGI / AFP)

“Of the remaining 8 million units, more than half of these cars were assembled from foreign parts. So what that means is less than 25 per cent of the cars sold in America contain US content on average. That stops right now with the Trump auto tariffs.”

Elon Musk recently announced Telsa would increase its US production, so they EV giant could be expected to pick up sales, overseas companies lose due to the tariffs.

Originally published as Trump tariff rampage tanks car giants