Asger Risom
The president signals potential tariff hikes to pressure automakers into reshoring production.
U.S. President Donald Trump is again flexing trade tools to steer the auto industry back home. Speaking Thursday at a White House event, he said he may soon raise tariffs on imported vehicles, a move he believes would encourage automakers to expand domestic operations, Reuters reports.
Investment surge cited amid tariff warnings
“The higher you go, the more likely it is they build a plant here,” Trump said, suggesting that a tariff hike could be imminent.
His comments come amid ongoing lobbying by automakers to ease the current 25% duties imposed during his previous administration.
Trump pointed to recent investment pledges as proof of the strategy’s success. General Motors this week announced $4 billion in upgrades to three U.S. factories and a plan to shift some SUV production from Mexico.
Hyundai’s March commitment of $21 billion in U.S. projects, including a new steel plant, was also cited.
“They wouldn’t have invested 10 cents if we didn’t have tariffs,” Trump said, emphasizing the role of trade pressure in bolstering domestic industry.
Industry warns of rising costs
However, the approach is drawing criticism. The Detroit Three have voiced concern over a proposed deal reducing tariffs on British imports, which would exclude Canada and Mexico.
Meanwhile, manufacturers like Ford and Subaru have raised prices on certain models to offset rising costs linked to tariffs.
Mexico, which exports significant volumes of cars to the U.S., reported that its vehicles now face an average 15% tariff—lower than the standard 25%—due to content-based reductions granted by Washington.
General Motors recently estimated its tariff exposure could reach $5 billion, with roughly $2 billion tied to entry-level imports from South Korea. Ford projected a $1.5 billion hit to adjusted earnings from tariffs alone.