đŸ‡ș🇾 Auto Industry vs. Trump Tariffs

The Battle for the Bottom Line

February 12, 2025

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The Gist

Trump’s latest tariffs are shaking up the auto industry—again. A 25% tariff on steel and aluminum kicks in March 12, while Mexico and Canada face a delayed 25% hit. A 10% tariff on China is already in effect, with China slapping back at 15%.

  • New car prices? Likely up by $2,700.

  • Job creation? Not looking great.

  • GM? Trying to dodge 50% of the impact.

  • Ford? Calling it “chaos.”

Dealers, stay sharp. This isn’t your first rodeo, and it won’t be your last.

Sources:

It’s hard to talk about the auto industry these days without talking tariffs, and it’s impossible to talk tariffs without getting political. But no matter how you voted, we’re all just trying to build an America we want our families to live in. So, let’s look at the facts.

"A Lot of Cost and A Lot of Chaos"—Ford’s CEO Isn’t Holding Back

Ford CEO Jim Farley isn’t mincing words when it comes to the Trump administration’s latest tariff plans. "So far, what we’re seeing is a lot of cost and a lot of chaos," he said at the Wolfe Research conference last week (Business Insider).

The key points of contention:

  • A 25% tariff on steel and aluminum goes into effect March 12.

  • Tariffs on Mexican and Canadian imports, also set at 25%, are delayed until at least March.

  • A new 10% tariff on Chinese goods is already in play, with China retaliating at 15%.

  • Trump is considering invoking an obscure 1930 law to impose up to 50% tariffs on nations "discriminating" against U.S. commerce (Reuters).

What This Means for Dealers

Will this raise car prices?

Short answer: Yes. The long answer? Also yes, but how much depends on how automakers respond.

  • New car prices could rise by up to $2,700, according to Jefferies analysts.

  • Automakers like GM expect to absorb some of the costs—potentially mitigating 30-50% of the impact without deploying capital.

  • Ford, with its mostly U.S.-sourced steel, might fare better, but industry-wide, supply chain disruptions are inevitable (AP News).

Will this mean job losses?

Industry leaders are skeptical that tariffs will result in more American jobs. As Glenn Stevens Jr. of MichAuto put it, "The short-term benefits of higher prices for steel and aluminum for domestic production are outweighed by a decrease in downstream effects."

Translation: Higher costs = lower sales = fewer jobs, not more.

The Bigger Picture: A Global Trade Shake-Up

Trump isn’t just focused on North America. His team is eyeing EU tariff disparities, arguing that Europe charges a 10% tariff on U.S. vehicles while the U.S. only charges 2.5% in return. If Trump follows through with "reciprocal tariffs," we could see an even bigger shift in global auto trade (Reuters).

What Comes Next?

  • March 1: The delayed 25% Mexico/Canada tariffs could take effect.

  • March 12: The 25% steel/aluminum tariffs hit full force.

  • Ongoing: Expect legal challenges, lobbying, and possible negotiations to determine whether these tariffs stick or get reversed like those from 2018.

ASOTU’s Final Thoughts

Look, you’re already tracking this. You know what tariffs mean: price hikes, supply chain scrambles, and more headaches than an overworked finance manager on a Saturday. But here’s the deal—dealers are some of the most adaptable, resilient businesspeople on the planet. This isn’t your first rodeo, and it won’t be your last.

The trick? Stay informed, stay flexible, and keep pushing for the policies that actually support the people on the ground—you, your teams, and the customers who rely on you. We’re not here to tell you how to think; we’re just connecting the dots so you can stay ahead of the curve. Because when the dust settles, dealers will still be here, making moves and keeping America rolling. Stay sharp, stay savvy, and as always—stay tuned.

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