These Car Brands Will Be Hit Hardest by Trump’s Tariffs

President Trump recently introduced a 25 percent tariff on all foreign-built cars. That means any vehicles assembled outside the US could see a price hike Stateside, including those built in Canada and Mexico. Even foreign-made parts for vehicles assembled in the US will be subject to the tariff, according to a statement issued by the White House.

“If you build your car in the US, there’s no tariff,” President Trump said.

The tariffs will take effect beginning on April 3, and President Trump suggests they could be “permanent.” The question is: Which vehicles and brands could benefit from these new tariffs the most, and which ones may be hit the hardest?

The Big Winners

Revisiting the Kogod School of Business’s 2024 American-made index, Tesla should benefit the most from these new tariffs. Each of Tesla’s vehicles achieves higher than 80 percent in total domestic content.

The Model 3 Performance sits at the top of the list, with 87.5 percent of its manufacturing and construction done domestically. The Model Y (85 percent), Cybertruck (82.5 percent), Model S (80 percent), and Model X (80 percent) are also atop the index.

That said, Tesla CEO Elon Musk suggests the company will not go “unscathed” under the new tariffs. In a post on X (formerly Twitter), Musk said: “Important to note that Tesla is NOT unscathed here. The tariff impact on Tesla is still significant.”

Even though the company produces motors and batteries here in the US, Tesla still imports many parts from China. Not including its American-made motors and batteries, the Model 3 Long Range otherwise “has 40 percent Chinese content,” American University associate professor of information technology and analytics, Frank DuBois, told Kelley Blue Book last year.

Second only to Tesla is Ford, with three versions of the Mustang using 80 percent domestic parts in its construction: the automatic transmission model, the GT, and the GT Coupe Premium. The Mustang GT with a manual—supplied by Getrag in Germany—uses just 73 percent domestic parts by comparison.

Honda also ranks highly with the Passport (76.5 percent), as well as the Odyssey, Ridgeline, and Pilot, which all score at 74 percent. The Jeep Wrangler uses 76 percent domestic parts. The Volkswagen ID.4 uses 75.5 domestic parts. Meanwhile, GM’s Chevrolet Colorado and GMC Canyon both score 75.5 percent.

Of the Big Three Detroit automakers, GM is the “worst positioned” under Trump’s new tariffs, according to JPMorgan analyst Ryan Brinkman. With nearly 40 percent of GM’s cars produced in Canada or Mexico, Brinkman estimates that the company could face a $14 billion hit in earnings.

That said, the White House has acknowledged that vehicles produced under the United States-Mexico-Canada Agreement (USMCA) will receive special considerations. Specifically, parts produced under USMCA won’t be subject to tariffs until the Commerce Secretary establishes a process for non-US content.

The Big Losers

On the opposite end of the spectrum, some foreign automakers could see a major hit to their US business under the new tariffs. Brands like Audi, BMW, Lexus, Mazda, and Toyota produce multiple models that rank near the bottom of the American-made index.

Specifically, some of our favorite affordable sports cars could be hit the hardest. The Miata, the Subaru BRZ, the Toyota GR86, and the GR Corolla score just 1 percent on the American-made index. Multiple BMW performance models also rank at just 1 percent, like the M3 sedan, the Z4, and the outgoing M8.

With automobiles making up 28.3 percent of all Japanese exports to the US in 2024, those automakers could be hit the hardest by the new tariffs. According to Reuters, shares from Nissan, Toyota, and Honda were already down 2.2 percent, 2.7 percent, and 3.0 percent, respectively, following the announcement. Hyundai and Kia both fell 4.0 percent.

Japanese Prime Minister Shigeru Ishiba says they will put “all options on the table” in combating Trump’s tariffs.

“Japan is a country that is making the largest amount of investment to the United States, so we wonder if it makes sense for (Washington) to apply uniform tariffs to all countries. That is a point we’ve been making and will continue to do so,” Ishiba said in a statement to parliament.

The Big Picture

Trump’s 25 percent tariff is likely to increase prices on foreign-imported cars. But former Vice Chairman of Product Development at GM, Bob Lutz, says these more stringent regulations on auto imports are a long time coming.

“The tariffs Trump is putting into effect merely mirror (roughly) the ones our major trading partners have had in effect for decades,” Lutz told Motor1. “There is no doubt that the duties will increase the price of non-US cars, and will result in a decline in their sales volume. That’s the purpose of tariffs.”

Currently, the European Union imposes a 10 percent tariff on US-imported cars, with another 20 percent in additional Value-Added Tax (VAT). Although recently, the EU has proposed lowering that number from 10 percent to 2.5 percent in an effort to ease trade tensions with the US, according to some reports.

“The US needs to protect its remaining industry,” Lutz notes, “just like all other nations do. Tariff-free imports mean low consumer prices, but also, loss of manufacturing jobs, which inevitably leads to national decline.

These tariffs will cause some short-term pain and dislocation, but the adjustment will be relatively rapid and to the benefit of global trade. The US living, year after year, with astronomical trade deficits versus main trading partners is not a sustainable situation.”