A new commercial war … American car taxes light up economic disputes
In the first minute of Thursday morning, the new customs duties imposed by the President of the United States Donald Trump entered the imports of cars, which have won radical changes in an American vital industry and a possible increase in the prices of tens of millions of cars that are sold every year throughout the country.
The customs duties imposed by Trump on cars cover 25 percent of imports of over $ 460 billion a year of vehicles and car parts, according to the analysis conducted by Reuters, based on the customs symbols included in the notification of the Federal Register, Wednesday.
The Trump update on customs duties on cars last week included about 150 categories of car parts that will be subject to customs duties starting from May 3, or a month after the implementation of the 25 percent commissions on cars imports. The menu includes customs tasks for engines, oil tankers, lithium -ion batteries and other main components, as well as less expensive spare parts such as tires, shock absorbers, combustion candles and brake tubes.
But the menu also includes automotive computers, which are located under the four -digit customs code that includes all computer products, including laptops, computers and tablets. The imports of this category amounted to $ 138.5 billion in 2024, according to data from the American statistical office.
With the exception of this category, total car imports and car parts in the United States amounted to $ 459.6 billion. The value of car computers was not immediately clear, which are basic ingredients in every modern car and trucks, including electric cars, as there is no separate customs code for these computers.
The cutting list has been revealed, with the times of customs duties that will be imposed on 3 May on these imports, before Trump announced the imposition of 10 % basic customs duties on all American imports, with many countries that imposed higher reprisals to deal with non -non -cont commercial barriers.
The high officials of the Trump administration have said that cars and car parts subject to customs duties pursuant to article 232 of national safety will not be subject to separate basic or retaliation costumes. In other words, car taxes do not accumulate on new revenge commissions that begin on April 5th. It is possible to add more parts to the list of customs duties, in which the White House has directed the Ministry of Commerce to put an operation within 90 days that allow local producers to request the targeting of imports of additional parts.
The notification indicated that as regards cars compatible with the rules of origin in the “United-Messic-Canada” agreement, importers can pay the customs functions of 25 % only on the non-American contents of the application.
What has just happened?
The Trump administration has imposed the customs duties of 25 percent on all cars imported to the United States starting from Thursday. These imports represent about half of the 16 million new cars purchased in the United States in 2024, according to the estimates of “Global Standard & Poor mobile”.
Mexico is the greatest exporter for these imports, as he has sent 2.5 million cars to American agents. Canada also exported 1.1 million cars, while 3.7 million cars came from North America, such as South Korea, Japan and Germany.
For decades, since the free trade agreement Nafta entered into force in the early 90s, car companies worked as if the United States, Mexico and Canada were a country, where the cut through the border is transferred several times during the assembly process. Today, each of the 10.2 million cars made in the factories of the United States contains a large amount of Mexican and Canadian pieces, between 25 percent and 60 percent.
The analysis of the Bank of America indicate that the imposition of customs duties on the car parts would increase the cost of American cars by about 4 thousand dollars, while other analyzes of Anderson Economic Group indicate that the cost can increase by over $ 12,000 for some vehicles.
The works of the automotive sector are in danger
The impact of the new customs duties on cars is not limited to high prices, but also extends to the risk of loss of work for workers in the American automotive sector. The data of the Ministry of Labor indicate that about one million people work in American factories that collect cars or produce spare parts necessary to manufacture them.
While the Trump administration states that the objective of these commissions is to create more job opportunities in the automotive sector by forcing manufacturers to transfer their production to the United States, the analyzes indicate the possibility of working losses before creating or reopening any new factories.
This is due to the nature of the integrated market of the automotive industry in North America. If the assembly factories in Mexico and Canada are closed due to the loss of access to the American market, this will directly influence the American suppliers who provide these factories with spare parts. According to data from the Ministry of Commerce, US car companies issued $ 35.8 billion from spare parts to Mexico and 28.4 billion dollars in Canada. As a result, these companies can be forced to reduce their production and reduce the number of workers in the United States.
In addition, the analyzes indicate that about one million cars made in the United States, equivalent to 10 percent of total American production, are exported to Canada and Mexico. If these two countries impose customs duties of retaliation on US cars, this will increase consumer prices on both sides of the border, threatening production levels in the United States.
Will customs duties lead to multiple jobs in the United States?
Trump insisted on Wednesday that customs duties on cars will lead to the acceleration of car producers to build or reopen factories in the United States, transferring production to unused factories or building new factories. But car manufacturers do not indicate any plan to move to the cost of production in the United States, at least in the short term.
Part of this is that the customs duties imposed by the Administration are instability, which does not provide the certainty that car producers must invest in billions of dollars in new factories.
The European car industry has to face the storm
“The German car industry has to face an economic storm, which is the most affected of value, as it is likely that it will face the main companies such as (Volkswagen), (BMW), (Mercedes) and (Porsche) significant effects due to customs duties”.
“But Slovakia, which hosts many automotive factories, is the most affected in terms of total size of its exports to the United States.”
Slovakia, with a population of 5.4 million, produces more cars per person than any other country in the world. Detroit Europe is strongly based on trade with the United States, since cars represent most of their exports there.
In a related context, South Africa expressed its will to meet US officials to discuss separate customs duties imposed by the American administration of 25 percent on cars imports. According to “Reuters”, the exports of South Africa from cars to the United States amounted to about two billion dollars.
