How Trump's auto industry tariffs will affect Thailand

[Gaybutton]

Auto industry rocked by Trump’s 25% tariffs

Automakers’ shares plunge amid warnings about higher costs, impact on jobs in US

by Reuters and Bloomberg

March 27, 2025

WASHINGTON - US automakers and their global rivals have been rocked by President Donald Trump’s announcement that he would impose 25% tariffs on all vehicles as well as many foreign-made auto parts imported into the United States.

The new levies, if kept for an extended period, could add thousands of dollars to the cost of an average US vehicle purchase and impede car production across North America.

That will be because of the intertwined manufacturing operations developed by carmakers across Canada, Mexico and the United States over the last three decades.

Nearly half of all cars sold in the United States last year were imported, the research firm GlobalData says.

Thailand exported 42,000 passenger cars to the United States in 2024, along with about $4 billion worth of parts. Producers have been warned to brace for turbulence as the new tariffs take effect.

The proclamation signed by Trump expands a trade war designed to bring more manufacturing jobs to the US and setting the stage for an even broader push on levies next week.

“We’re going to charge countries for doing business in our country and taking our jobs, taking our wealth, taking a lot of things that they’ve been taking over the years,” Trump said at the White House on Wednesday.

The automobile tariffs would be collected starting at 12.01am Washington time on April 3.

The White House said tariffs would apply not only to fully assembled cars but key parts, including engines, transmissions, powertrain parts and electrical components. The tariffs on parts will take effect no later than May 3, according to the proclamation. That list could also expand over time to encompass additional parts.

Importers of automobiles under the US-Mexico-Canada Agreement (USMCA) will get the chance to certify their US content so that only non-US content is taxed, the White House said.

Trump cast the tariffs as “permanent” and said he was not interested in negotiating any exceptions. Shares of General Motors plunged 8% while Ford and Stellantis dropped 4.5% in after-hours trading as Trump spoke. Asian carmakers declined by 3-4%, led by Toyota, in early trade on Thursday.

Shares in Tesla, which makes all the cars sold in the United States locally but with some imported parts, were down 1.3%.

Trump said the duties announced on Wednesday could be net neutral or even good for Tesla, adding that its CEO, and his close ally, Elon Musk, did not advise him regarding auto tariffs.

In a post on X, Musk acknowledged the tariffs would also affect Tesla.

“This will affect the price of parts in Tesla cars that come from other countries,” he wrote. “The cost impact is not trivial.”

Trump’s tariffs and threats to impose them have sowed uncertainty in businesses and roiled global markets since he returned to the White House in January.

On Wednesday, Trump reiterated that he expected the auto tariffs to prompt automakers to boost investment in the United States, instead of Canada or Mexico.

Autos Drive America, a group representing major foreign automakers such as Honda, Hyundai, Toyota and Volkswagen, said the “tariffs imposed today will make it more expensive to produce and sell cars in the United States, ultimately leading to higher prices, fewer options for consumers, and fewer manufacturing jobs in the US”.

Automakers in North America have largely enjoyed free trade status since 1994. The USMCA, which Trump introduced in 2020, imposed new rules designed to spur regional content production.

After clamping tariffs of 25% on Mexico and Canada in early March, Trump allowed a one-month reprieve for vehicles produced in compliance with the terms of his USMCA, which benefited American companies.

The new rules do not extend that reprieve.

“Companies that have invested hundreds of millions and billions of dollars on plants in Canada and Mexico will likely see their profits cut dramatically over the next few quarters, if not into a couple years,” said Sam Fiorani, an analyst at AutoForecast Solutions.

“We’re going to look at adjusting our sales and production forecasts because this will throw everything into chaos.”

Before the announcement of the new tariffs, Cox Automotive, an automotive services provider, predicted they would add $3,000 to the cost of a US-made vehicle and $6,000 on vehicles made in Canada or Mexico, without exemptions.

If tariffs go through, by mid-April Cox expects disruption to “virtually all” North American vehicle output, leading to 20,000 fewer vehicles a day, or a hit of about 30% to production.

The United Auto Workers union, which represents factory workers at Big Three Detroit automakers, praised Trump’s action.

“With these tariffs, thousands of good-paying blue collar auto jobs could be brought back to working-class communities across the United States within a matter of months, simply by adding additional shifts or lines in a number of underutilised auto plants,” UAW president Shawn Fain said in a statement.

https://www.bangkokpost.com/business/ge ... 25-tariffs

[Jun]

Doesn't Thailand charge a far higher tariff on imported cars and over 200% on "luxury cars" ?
Some of the cars the US might hope to export would be in that category.

Whilst I'm against Trump's scattergun approach to tariffs, if my understanding is correct, Thailand deserves it.

Also, the US will shortly be seeing a lot of inflation. I suspect the voters won't like that.

[Gaybutton]

All I know is if I were in need of a new car, I'd buy it right now - before prices skyrocket through the roof.

[Dodger]

Prices of cars in the U.S. are going to skyrocket.

Global supply-chains which took decades to develop will implode - before reinventing themselves excluding U.S. markets almost entirely.

Thailand's huge automotive parts exports will likely suffer - but a high percentage of auto parts and accessories produced in Thailand may be exempt from tariffs because of their non-critical nature.

Thailand's internal (domestic) supply-chain will suffer as well, although these supply-chains also feed Japan, Korea, Australia, and several others, so it remains to be seen how much this will hurt them.

The reason these global automotive supply-chains were developed to begin with was to keep the labor costs down, as the average UAW Union worker in a U.S. automotive plant earns quadruple what a worker earns in countries like Mexico, Brazil, Vietnam, Thailand, etc.

Once these countries stop importing cars and car parts to the U.S. the cost-to-produce will immediately start to skyrocket, and this doesn't include the $$billions$$ that it will cost the Big 3 automakers in the U.S. to re-tool their manufacturing processes to start producing the new vehicle designs. The engineering time alone is almost impossible to fathom.

What I believe we're going to see is a tsunami effect on the entire global supply-chain.

Tariffs like these have to be extremely well planned, incremental, strategically timed, well-communicated with cross-functional teams involving all players (all countries), not this half-assed cannonball approach. Trump hasn't the foggiest clue what he's doing.

[Dodger]

Article below just posted a few hours ago on CNN.

Pertains to how Trumps tariffs could effect the U.S Auto Industry:

https://edition.cnn.com/2025/03/27/cars ... index.html

[Jun]

The reason these global automotive supply-chains were developed to begin with was to keep the labor costs down, as the average UAW Union worker in a U.S. automotive plant earns quadruple what a worker earns in countries like Mexico, Brazil, Vietnam, Thailand, etc.

The UAW has to be a very big contributor to manufacturing moving outside of the US ? The production & non-supervisory staff at motor vehicle makers earn just under $38 per hour. https://www.bls.gov/iag/tgs/iagauto.htm

I know very little about the US, but surely that's very high for mostly unskilled work ?
[By unskilled, I mean work requiring no qualifications that anyone with aptitude could pick up almost immediately. Yes, I have visited car plants.]

If Trump wants to onshore manufacturing, surely he needs to tackle excessive Union power ?

If a company builds a large car plant, they need to keep the lines running to earn a return on that investment. Also, non-premium car manufacturing is a low margin business, so they can't afford to give away margin by overpaying workers.

Unions have also contributed to the demise of the British car industry and the supply chain for it. Incompetent management & government interference also contributed.