Tariffs are nothing new to the automotive landscape, especially in America, where things like the Chicken Tax have greatly influenced our automotive landscape to drive the local manufacturing of trucks and vans. In a similar vein, incentives, like the EV incentives from the Inflation Reduction Act (IRA), have had a significant impact on US production, driving investment announcements as automakers tried to cement their footing in the world's second-largest automotive economy. Think of these two tactics as the stick and the carrot when it comes to driving automotive investment, both of which have been used successfully and unsuccessfully to varying degrees over the last 100 or so years.
America's newest administration, under President Donald Trump, is leaning heavily into the 'stick' methodology, announcing sweeping tariffs against dozens of countries, along with industry-specific tariffs. The country-specific tariffs may have been placed on pause for 90 days, but for the automotive industry, there's a 25% import tariff in full effect immediately. This has thrown the industry into disarray as dealers struggle to commit to pricing and automakers have to decide whether or not to pause imports, leave cars at ports, or absorb the costs, and then whether the customer is to bear these additional costs or not. Thus far, we've seen a mix of all these decisions, but the only certainty is that there is none.
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