The United States is reeling after President Donald Trump revealed the details of his tariffs plan this week, which will affect everything from the technology we rely on every day of our lives to the cars we drive.
Looking at the Reciprocal Tariffs chart that The White House released on April 2, it doesn’t take too much in-depth reading to realize just how hard key businesses that count on imported goods will be hit by these changes.
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While Trump’s plan to bring back a time when most of its revenue came from tariffs rather than income taxes, its execution could spell disaster for many of the companies Americans rely on to purchase items we need to live – especially if the companies are forced to charge more for those products to continue operating successfully.
However, it’s not just outright tariffs on autos themself that are a problem for the industry. There’s another lurking threat.
There’s a lot under the hood – and much of it is made outside the US.
How the automotive industry is responding
Automotive companies have already begun to make moves in response to the new tariffs, signaling some of what’s to come. Stellantis was one of them, announcing on April 3 that it would pause production at two of its assembly plants in Canada and Mexico.
Related: Major U.S. automaker makes harsh decision in wake of tariff tussle
Another company quick to react to the news is Volkswagen of America, which announced in a memo to dealers that an import fee would be added to the destination charge on vehicles assembled outside the US. It has also halted all rail shipments of vehicles built in Mexico, Automotive News reports.
Nissan’s Infinity luxury brand has also “indefinitely paused” the manufacturing of two crossovers for the US that were built in Mexico, according to a memo also obtained by Automotive News.
More tariffs news:
Major US automaker makes harsh decision in wake of tariff tussleAnalysts see challenges for Apple over tariffsWalmart doubles down on harsh tactic to shrink threat of tariffs
What’s affected under the hood matters
Tariffs will also affect auto parts, most of which are manufactured overseas. That’s a big underappreciated problem even for car companies that assemble vehicles in America.
If you’re curious about what car parts are affected by the new tariffs, the news is unfortunate: it’s nearly everything. Here is a partial list of some key ones:Â
AirbagsAir conditionersAxelsBrake hosesBumpersCamerasCatalytic converters or particulate filtersClutchesElectric motorsFuel-injection pumps for compression-ignition enginesGear boxesGenerators Ignition coilsJacksLead-acid storage batteriesLithium-ion batteriesLocksMagnetic flywheelsOil or fuel filtersRadiatorsRadiosRearview mirrorsSafety glassSeat beltsSeatsSignal flashersSpark plugsSpeedometersTransmission shaftsTurbochargers and superchargersCompression-ignition internal combustion piston enginesSpark-ignition Windshield wipers
What car companies will be most affected?
If you’re considering buying a car in the future and this information is scaring you, it is worth noting that certain car companies will emerge from this much stronger than others.
At the top of that heap is Tesla. Its Model 3 is 87.5% constructed and manufactured domestically, closely followed by its Model Y (85%), Cybertruck (82.5%), and Model X and S (80%). However, CEO Elon Musk was quick to note that Tesla is not dodging the effects of the tariffs in full, saying in a post on X, “Important to note that Tesla is NOT unscathed here. The tariff impact on Tesla is still significant.”
Honda is also in a good spot, having increased its US production steadily over the years. It now features 63% total domestic content, and its Honda Passport features 76.5% – and the higher the percentage, the less the tariffs will hurt.
On the other hand, some car companies are in a really bad spot.Â
Toyota, Lexus, Mazda, and BMW all have models near the bottom of the American-made index, including the Nissan Rogue SUV, Mercedes Benz’s GLS, GLE, and EQE SUVs, and the BMW X3 SUV.Â
Highly popular imports like the Toyota GR Corolla only have 1% domestic content, which spells a big price hike in the future.
Related: Trump tariff showdown could have huge impact on housing market
