March 27 - US President announced a 25% tariffs on all foreign made cars imported into the USA. The move will affect badly European auto manufacturers like Mercedes-Benz, BMW, Audi, Stallantis group among others. Chinese car manufacturers will also be affected as this basically makes their products lose their competitive edge when it comes to pricing. It will also affect US auto giants GM and Ford who do have production in Canada and Mexico.
Tesla is the most American made car in current times however its CEO Elon Musk that the impact on the Company would be significant.
The way to escape these tariffs is for these Companies to shift manufacturing facilities into the USA and that is the main aim of what President Trump is trying to achieve here. South Korean manufacturer Hyundai has already announced it would be setting up in US.
We are likely to see more such moves because these tariffs are very high. The stock markets in the US sold off sharply yesterday as they perceived this to be an escalation of the trade war and everyone is now worried about what counter measures Countries like China and Germany would impose on US auto manufacturers.
President Trump has also warned Canada and EU that if they collaborate against US economic interests, even higher tariffs could be on the way.