Major automakers tabulated the cost of tariffs and announced moves to increase U.S. production of certain vehicles Thursday, underscoring the market-moving power of President Trump’s trade actions.
American automaker GM told investors on Thursday that Mr. Trump’s tariffs could cost the company $4 billion to $5 billion this year.
“We look forward to maintaining our strong dialogue with the administration on trade and other policies as they continue to evolve,” GM CEO Mary Barra wrote in a letter to shareholders. “As you know, there are ongoing discussions with key trade partners that may also have an impact. We will continue to be nimble and disciplined and update you as we know more.”
Mr. Trump imposed a 25% tariff on automobiles that are made outside the U.S. and brought into the country, hoping to centralize car-making within the U.S.
The GM letter said the cost estimate took into account Mr. Trump’s recent actions to soften the blow from auto tariffs, including efforts to avoid double taxation from other levies and phased-in enforcement of tariffs on foreign parts that go into U.S.-assembled cars.
Ms. Barra told CNN she does not expect to pass along the tariff costs to consumers.
“Pricing is going to stay at about the same level as it is,” she said. “Pricing changes in our industry at least monthly, and sometimes more frequently. We’re going to respond to the market.”
Meanwhile, German automaker Mercedes-Benz said it planned to bring the production of a core segment vehicle to a plant in Tuscaloosa, Alabama, by 2027.
“We are getting even closer to the U.S. customer by localizing a core segment model in Tuscaloosa, strengthening our ties to the North American market where a range of Mercedes-Benz vehicles including the GLE and GLS models have their roots,” said Jason Hoff, CEO of Mercedes-Benz North America.
Mercedes did not mention Mr. Trump’s tariffs in the announcement, but the context was hard to ignore.
Mr. Trump is heaping pressure on foreign automakers to make their vehicles in America, saying it is the only way to avoid taxation under his tariff framework.
“We’re going to have growth in the auto industry like nobody’s ever seen,” Mr. Trump said in a joint address to Congress this year.
Implementing the plan is complicated, however, given the interwoven nature of car manufacturing that requires parts to be sent across borders, notably among factories in the U.S., Mexico and Canada.
Mr. Trump granted relief from auto-parts tariffs on Tuesday so carmakers had time to adjust their supply chains.
“We just wanted to help them enjoy this little transition, short-term,” Mr. Trump said. “If they can’t get parts, we didn’t want to penalize them.”
