President Trump’s announcement of a 25 % tariff on imported cars and spare parts on March 26, 2025 has sent shock waves through the auto and financial markets industry – consumers are rushing to buy cars before any potential rise in prices, and investors are scrambling to assess the repercussions.(1)
Definitions such as these are often seen as a direct blow to the lower lines of auto manufacturers because they increase production costs and disrupt global supply chains. While companies with strong supply chains in the United States can, theoretically, gain a competitive advantage as competitors depend on foreign components at higher costs, industry analysts believe that this new tax will earn a few vehicle manufacturers.(2)
From the primary market reactions to long -term directions, we assess how these new definitions affect stock prices for the largest players in the industry. We dive into the true impact of these commercial policies on auto manufacturers in different regions.
Impact on American automaker companies
To date, Lucid Group Stock (Lucid Motors) is the “bigger winner”, as the price of his share decreased by only 3 %, with a General Motors (GM), as he lost 4 % and fell Tesla (TSLA) by 5 %.
Impact on European auto manufacturers
There were no winners in the European auto industry market, where Ferrari (race), Polestar (PSNY) and Porsche (DrPry) “The best performance” with a 2 % loss since the day of publication of definitions.
Impact on Asian car manufacturers
Xiaomi (XIACF) is the best performance of Asian car manufacturers and has seen their prices increased by 3.84 % since the implementation of definitions.
Impact on auto companies in the Middle East
Among the Middle East car manufacturers, Ford Autusan has seen its prices increased by 3.36 % since the declaration of customs tariffs.
What are the definitions?
Customs duties are the taxes imposed by governments on goods that enter or leave a country, and are usually used to increase revenues, protect local industries or regulate international trade.(3)
It dates back thousands of years, definitions have always been a tool for economic policy.(4) They have gained importance in the United States through the 1789 US tariff law, which aims to protect local manufacturing and generate revenues, and witnessed a return to use as a political tool under the Trump administration.(5)
Trump’s tariff for cars
The Trump administration announced on Wednesday, March 26, 2025, a 25 % tariff on auto imports and some auto parts, with the aim of enhancing American manufacturing and protecting national security.(6)
The executive announcement imposes a 25 % tariff on all cars that are shipped to the United States, as of April 3, 2025. The tariff will follow the main car parts – engines, transportation, power generation and electrical components – on May 3.(7)
The White House expects automatic definitions to raise $ 100 billion in revenue annually.(8)
The effect of automatic definitions on stocks from different regions
According to the Wedbush Securities Inc. analyst. Daniel Evz, Trump’s car tariff “will lead to pure chaos for the global auto industry” and increase the average price of cars sold in the United States by $ 10,000.(9)
This is what we see until now when looking at stock prices.
According to our data, the shares of the auto manufacturer in all fields responded to the announcement of President Trump by 25 %, as the shares of the auto company in the United States witnessed the largest decrease in the average.
