US President Donald Trump’s decision to impose 25 per cent tariffs on all imported vehicles and parts is expected to drive up car prices for American consumers, while disrupting supply chains for the industry across North America.
Starting April 3, new tariffs will be levied on complete vehicles and parts entering the US. The move will not only affect foreign car makers but also American companies that use imported components, including Ford Motor and General Motors, which carry out some manufacturing in Canada and Mexico.
About half of all cars sold in America last year were imported, according to research firm GlobalData.
“It's hard not to interpret this as anything but a cue for higher prices and lower growth, with a soft landing becoming more complicated. Countries most exposed to the new auto tariffs are Slovakia, Mexico, South Korea and Japan,” said Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities in Singapore.
Shares of General Motors slumped 6.2 per cent in after-hours trading, while Ford was down nearly 5 per cent. The US-listed shares of Chrysler-parent Stellantis dropped by 4 per cent. Shares of Tesla, which makes all cars sold in the US locally, were down 1.3 per cent.
In Asia, Toyota Motor's stock fell by 2.6 per cent, Honda Motor's by 2.8 per cent and Hyundai Motor's by more than 4 per cent.
The US car market recorded continued growth in new-car sales throughout last year, recovering from pandemic-era lows. That was driven by increased vehicle availability, more attractive financial incentives and a significant rise in consumer interest in hybrid models.
New vehicle sales reached 15.9 million last year, up 2.2 per cent from 2023, and the highest since 2019, according to data from Wards Intelligence.
Car makers initially expected strong sales to continue this year, but the latest tariffs and the removal of tax credits for electric vehicles have increased uncertainty.
“The move, aimed at turbocharging domestic car manufacturing, will almost certainly backfire,” said Nigel Green, chief executive of global financial advisory company deVere Group. “It will dent consumer confidence and slow US growth – and it will impact the global economy, compromising America’s credibility as a trading partner."
The news has sent shock waves across global markets. Japan's Topix was down 0.50 per cent and Australia's S&P/ASX 200 was 0.38 per cent lower, but Hong Kong's Hang Seng and India’s BSE Sensex Index were up nearly 1 per cent each at 10.08am UAE time on Thursday.
The S&P 500, which tracks the performance of 500 large-cap US companies, closed 1.2 per cent lower on Wednesday. Equity-index futures for the S&P 500 were up 0.1 per cent, while contracts for Nasdaq 100 were slightly lower.
Supply chain challenges
Unlike previous tariff announcements, which were mostly temporary negotiation tactics, this one is likely to be sustained for a longer period, although there could be exemptions for US car makers, said Chuck Carlson, chief executive of Horizon Investment Services.
"I could see the US auto makers getting some exemptions based on their supply chains. But I think [Mr Trump] may want to see how this works out as opposed to stopping it in two or three days ... this particular tariff might have legs in terms of its longevity," he added.
The tightly connected car industry of the US, Canada and Mexico – shaped by decades of trade deals, such as the North American Free Trade Agreement and the United States-Mexico-Canada Agreement – relies on complex supply chains, where parts and vehicles cross borders several times. This makes production across North America highly vulnerable to disruptions.
The average percentage of American and Canadian parts in cars sold in the US dropped from 38 per cent in 2007 to 18 per cent in 2023, according to an allamerican.org report last year.
The report, which analysed manufacturer data, found a consistent trend of low American and Canadian content in vehicles sold in the US. Among major car makers, Tesla led with 65 per cent, followed by Honda at 60 per cent.
In contrast, traditional American manufacturers ranked lower, with General Motors at 41 per cent, Ford at 30 per cent and Chrysler at 23 per cent. They were behind foreign brands including Volkswagen, Subaru and Nissan.
In a statement released on Wednesday, American Automakers, an industry body consisting of Ford, GM and Stellantis, said tariffs should be introduced in a way that avoids raising prices for consumers and "preserves the competitiveness" of the integrated North American car manufacturing sector.
Tesla impact
Mr Trump has said the tariffs could benefit Tesla, but affirmed that Elon Musk, the company's chief executive and a close political ally, had no input on the tariff decisions.
However, Mr Musk has said tariffs will affect the electric vehicle maker, which is the largest car manufacturer in the world in terms of market value.
"Important to note that Tesla is not unscathed here. The tariff impact on Tesla is still significant," Mr Musk said in a post on X.
"This will affect the price of parts in Tesla cars that come from other countries," he wrote in a separate post. "The cost impact is not trivial."
Tesla's shares have dropped by more than 28 per cent since the start of the year, as demand for its electric cars weakens amid backlash over Mr Musk's far-right political remarks and the emergence of cheaper options.
Zayed Sustainability Prize
Killing of Qassem Suleimani
Killing of Qassem Suleimani
The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
Mohammed bin Zayed Majlis
Mohammed bin Zayed Majlis
SHAITTAN
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Stree
Producer: Maddock Films, Jio Movies
Director: Amar Kaushik
Cast: Rajkummar Rao, Shraddha Kapoor, Pankaj Tripathi, Aparshakti Khurana, Abhishek Banerjee
Rating: 3.5
Killing of Qassem Suleimani
SERIE A FIXTURES
Saturday
AC Milan v Sampdoria (2.30pm kick-off UAE)
Atalanta v Udinese (5pm)
Benevento v Parma (5pm)
Cagliari v Hellas Verona (5pm)
Genoa v Fiorentina (5pm)
Lazio v Spezia (5pm)
Napoli v Crotone (5pm)
Sassuolo v Roma (5pm)
Torino v Juventus (8pm)
Bologna v Inter Milan (10.45pm)
Mohammed bin Zayed Majlis
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UAE%20v%20West%20Indies
%3Cp%3EFirst%20ODI%20-%20Sunday%2C%20June%204%20%0D%3Cbr%3ESecond%20ODI%20-%20Tuesday%2C%20June%206%20%0D%3Cbr%3EThird%20ODI%20-%20Friday%2C%20June%209%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3EMatches%20at%20Sharjah%20Cricket%20Stadium.%20All%20games%20start%20at%204.30pm%0D%3Cbr%3E%0D%3Cbr%3E%3Cstrong%3EUAE%20squad%3C%2Fstrong%3E%0D%3Cbr%3EMuhammad%20Waseem%20(captain)%2C%20Aayan%20Khan%2C%20Adithya%20Shetty%2C%20Ali%20Naseer%2C%20Ansh%20Tandon%2C%20Aryansh%20Sharma%2C%20Asif%20Khan%2C%20Basil%20Hameed%2C%20Ethan%20D%E2%80%99Souza%2C%20Fahad%20Nawaz%2C%20Jonathan%20Figy%2C%20Junaid%20Siddique%2C%20Karthik%20Meiyappan%2C%20Lovepreet%20Singh%2C%20Matiullah%2C%20Mohammed%20Faraazuddin%2C%20Muhammad%20Jawadullah%2C%20Rameez%20Shahzad%2C%20Rohan%20Mustafa%2C%20Sanchit%20Sharma%2C%20Vriitya%20Aravind%2C%20Zahoor%20Khan%0D%3C%2Fp%3E%0A
The specs
Engine: 2.0-litre 4-cyl turbo
Power: 201hp at 5,200rpm
Torque: 320Nm at 1,750-4,000rpm
Transmission: 6-speed auto
Fuel consumption: 8.7L/100km
Price: Dh133,900
On sale: now
The past Palme d'Or winners
2018 Shoplifters, Hirokazu Kore-eda
2017 The Square, Ruben Ostlund
2016 I, Daniel Blake, Ken Loach
2015 Dheepan, Jacques Audiard
2014 Winter Sleep (Kış Uykusu), Nuri Bilge Ceylan
2013 Blue is the Warmest Colour (La Vie d'Adèle: Chapitres 1 et 2), Abdellatif Kechiche, Adele Exarchopoulos and Lea Seydoux
2012 Amour, Michael Haneke
2011 The Tree of Life, Terrence Malick
2010 Uncle Boonmee Who Can Recall His Past Lives (Lung Bunmi Raluek Chat), Apichatpong Weerasethakul
2009 The White Ribbon (Eine deutsche Kindergeschichte), Michael Haneke
2008 The Class (Entre les murs), Laurent Cantet
MATCH INFO
Chelsea 4 (Mount 18',Werner 44', Hudson-Odoi 49', Havertz 85')
Morecambe 0
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Zayed Sustainability Prize
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UAE currency: the story behind the money in your pockets
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
Honeymoonish
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Killing of Qassem Suleimani
Mohammed bin Zayed Majlis
Killing of Qassem Suleimani
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Kanguva
Director: Siva
Stars: Suriya, Bobby Deol, Disha Patani, Yogi Babu, Redin Kingsley
The five pillars of Islam
Jordan cabinet changes
In
- Raed Mozafar Abu Al Saoud, Minister of Water and Irrigation
- Dr Bassam Samir Al Talhouni, Minister of Justice
- Majd Mohamed Shoueikeh, State Minister of Development of Foundation Performance
- Azmi Mahmud Mohafaza, Minister of Education and Minister of Higher Education and Scientific Research
- Falah Abdalla Al Ammoush, Minister of Public Works and Housing
- Basma Moussa Ishakat, Minister of Social Development
- Dr Ghazi Monawar Al Zein, Minister of Health
- Ibrahim Sobhi Alshahahede, Minister of Agriculture and Minister of Environment
- Dr Mohamed Suleiman Aburamman, Minister of Culture and Minister of Youth
Out
- Dr Adel Issa Al Tawissi, Minister of High Education and Scientific Research
- Hala Noaman “Basiso Lattouf”, Minister of Social Development
- Dr Mahmud Yassin Al Sheyab, Minister of Health
- Yahya Moussa Kasbi, Minister of Public Works and Housing
- Nayef Hamidi Al Fayez, Minister of Environment
- Majd Mohamed Shoueika, Minister of Public Sector Development
- Khalid Moussa Al Huneifat, Minister of Agriculture
- Dr Awad Abu Jarad Al Mushakiba, Minister of Justice
- Mounir Moussa Ouwais, Minister of Water and Agriculture
- Dr Azmi Mahmud Mohafaza, Minister of Education
- Mokarram Mustafa Al Kaysi, Minister of Youth
- Basma Mohamed Al Nousour, Minister of Culture
ALL THE RESULTS
Bantamweight
Siyovush Gulmomdov (TJK) bt Rey Nacionales (PHI) by decision.
Lightweight
Alexandru Chitoran (ROU) bt Hussein Fakhir Abed (SYR) by submission.
Catch 74kg
Omar Hussein (JOR) bt Tohir Zhuraev (TJK) by decision.
Strawweight (Female)
Seo Ye-dam (KOR) bt Weronika Zygmunt (POL) by decision.
Featherweight
Kaan Ofli (TUR) bt Walid Laidi (ALG) by TKO.
Lightweight
Abdulla Al Bousheiri (KUW) bt Leandro Martins (BRA) by TKO.
Welterweight
Ahmad Labban (LEB) bt Sofiane Benchohra (ALG) by TKO.
Bantamweight
Jaures Dea (CAM) v Nawras Abzakh (JOR) no contest.
Lightweight
Mohammed Yahya (UAE) bt Glen Ranillo (PHI) by TKO round 1.
Lightweight
Alan Omer (GER) bt Aidan Aguilera (AUS) by TKO round 1.
Welterweight
Mounir Lazzez (TUN) bt Sasha Palatkinov (HKG) by TKO round 1.
Featherweight title bout
Romando Dy (PHI) v Lee Do-gyeom (KOR) by KO round 1.
The years Ramadan fell in May
Who has been sanctioned?
Daniella Weiss and Nachala
Described as 'the grandmother of the settler movement', she has encouraged the expansion of settlements for decades. The 79 year old leads radical settler movement Nachala, whose aim is for Israel to annex Gaza and the occupied West Bank, where it helps settlers built outposts.
Harel Libi & Libi Construction and Infrastructure
Libi has been involved in threatening and perpetuating acts of aggression and violence against Palestinians. His firm has provided logistical and financial support for the establishment of illegal outposts.
Zohar Sabah
Runs a settler outpost named Zohar’s Farm and has previously faced charges of violence against Palestinians. He was indicted by Israel’s State Attorney’s Office in September for allegedly participating in a violent attack against Palestinians and activists in the West Bank village of Muarrajat.
Coco’s Farm and Neria’s Farm
These are illegal outposts in the West Bank, which are at the vanguard of the settler movement. According to the UK, they are associated with people who have been involved in enabling, inciting, promoting or providing support for activities that amount to “serious abuse”.
KILLING OF QASSEM SULEIMANI
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Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
Killing of Qassem Suleimani
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The five pillars of Islam
MANDOOB
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The specs
Engine: 2.0-litre turbo 4-cyl
Transmission: eight-speed auto
Power: 190bhp
Torque: 300Nm
Price: Dh169,900
On sale: now
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Most sought after workplace benefits in the UAE
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Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants
