According to media reports, on June 12, U.S. President Donald Trump warned that he may soon raise tariffs on automobiles, claiming that such a move would encourage automakers to increase their investments in the United States.
Speaking at a White House event, Trump stated, "I may raise auto tariffs in the near future. The higher the tariff, the more likely car manufacturers are to build plants in the United States."
Trump cited a series of recent investment announcements, including General Motors' plan to invest $4 billion in three U.S. factories and shift some SUV production from Mexico to the U.S. He also referenced Hyundai's $21 billion investment announced in March, which includes building a new steel plant in the U.S.
"If we don't raise tariffs, they won't invest a penny - that includes the U.S. steel industry," Trump said, adding, "Now the American steel industry is doing very well."
However, automakers have been pressuring the White House to reduce the 25% tariffs imposed by the Trump administration. Detroit's Big Three - General Motors, Ford, and Stellantis - have criticized a trade agreement between the U.K. and the U.S. that lowered tariffs on British car imports but kept tariffs on Canadian and Mexican vehicles unchanged. All three companies operate significant manufacturing facilities in both Canada and Mexico.
Last month, Mexico announced that cars assembled there and exported to the U.S. would face an average tariff of 15% - instead of 25% - as the U.S. government is providing tariff relief based on the percentage of U.S.-made components in the vehicles.
Automakers are increasingly burdened by the rising costs associated with these tariffs. In recent weeks, Ford and Subaru of America have raised prices on certain models due to cost increases triggered by the tariffs. In May, Ford estimated that the tariffs would reduce its adjusted earnings by about $1.5 billion.
Last month, General Motors reported that it currently faces $4–5 billion in tariff exposure, with approximately $2 billion linked to affordable models imported from South Korea, where GM manufactures entry-level Chevrolet and Buick vehicles.
