Trump’s tariffs on imported vehicles and auto parts are shaking up the global automotive industry, with leading automakers reporting billions in additional costs that are rippling through production, pricing, and profitability. The latest round of tariffs imposes a 25% duty on imported passenger cars, SUVs, trucks, and key components such as engines and transmissions. This policy is intended to bolster the U.S. auto sector but is creating immediate financial shockwaves for global car makers.

Automakers are under intense pressure. General Motors, for example, absorbed $1.1 billion in tariff costs in the last quarter alone, expecting a total impact of up to $5 billion for the year. Ford projects a $3 billion hit by year-end, while multinational giants like Toyota, Nissan, and Hyundai face similar challenges. The cumulative cost across automakers now tallies over $11.7 billion, with the number expected to rise as imports remain a vital part of their U.S. operations.

European brands have taken especially hard blows, facing added costs of about $8,500 per vehicle from the EU. Korean imports account for roughly $4,000 more per unit in tariffs, and even cars built in Mexico—long seen as a cost-effective production base—are feeling the squeeze, with a $4,800 tariff cost per vehicle flipping the established business model on its head.

In the short term, many automakers are absorbing the extra costs to keep prices stable for consumers. However, industry leaders warn that sustained tariffs will mean slimmer profit margins, delayed investments, and eventually higher prices for consumers. Some automakers are planning to shift more production to the U.S. to avoid tariffs, while others are re-evaluating which models to import or even considering pulling certain vehicles from the American market altogether.

The long-term effect of these tariffs is still unfolding, but one outcome is clear: automakers, dealers, and consumers are all facing an era of higher costs and tough decisions driven by new trade realities.