What car imports to U.S. might be hit by tariffs
Over the past three decades, the global auto industry has gotten, well, more global. Manufacturers built scores of factories outside their home countries to reduce exposure to currency swings, take advantage of cheaper labor and manufacture cars closer to buyers.
BMW AG makes sport utility vehicles in South Carolina. Toyota Motor Corp. produces sedans in Kentucky. General Motors Co. manufactures pickups in Mexico. Hyundai Motor Co. assembles crossovers in the Czech Republic. And almost everyone is producing more of almost everything in China.
While cars are typically sold in the countries where they’re made, it’s still not uncommon for them to also be shipped from one nation to another. BMW, for instance, is America’s top auto exporter, sending some $10 billion worth of vehicles including the X5 SUV to other nations last year.
Despite this evolution, global automotive trade is under threat by President Donald Trump embarking on battles he’s described as easy to win. Cars are significant contributors to deficits he’s repeatedly said reflect unfair treatment of U.S. products, including by the European Union. Trump tweeted Friday that if the EU doesn’t remove levies and take down trade barriers, the U.S. will hit its cars with 20 percent tariffs.
For all the tough talk and threats, the first country whose autos Trump may be closest to targeting with tariffs is one the U.S. actually has a surplus with: China. Cars were among the products that made the list of $50 billion in goods that the U.S. plans to slap with 25 percent levies early next month. In response, Beijing has said it will tax American merchandise – including autos – with the “same scale and intensity.”
Weeks before the tariffs are even supposed to be implemented, their first high-profile victim has already stepped forward. Daimler AG said Wednesday that profit will suffer as exports from its Alabama factory to China will likely will be lower than the 60,000 vehicles it had expected this year.
The risk for the global auto industry is that this may be merely an opening salvo in a battle by the Trump administration against cars shipped to American shores. The Commerce Department is looking into whether vehicle imports pose a national security threat, and tariffs of as much as 25 percent are said to be under consideration.
Here’s an in-depth look at the top models automakers imported to the U.S. last year, from the countries that sent America more cars than anywhere else:
Hitting vehicles assembled in Mexico with tariffs would deal a significant blow to a segment that might surprise American consumers: Detroit-branded pickup trucks.
Last year, two of the top-selling models imported from Mexico were GM’s Chevrolet Silverado and heavy-duty versions of Fiat Chrysler Automobiles NV’s Ram pickups. While Trump has touted Fiat Chrysler’s plans to shift production from Mexico, that’s not happening until 2020.
GM is about to add to the flow of Mexican imports by bringing back the Blazer SUV and building it at the company’s plant in Ramos Arizpe.
Japan’s Toyota and Honda Motor Co. would be hit hardest if the U.S. decides to tax autos built by its neighbor to the north. But GM and Fiat Chrysler wouldn’t be spared harm.
The Toyota RAV4, Honda CR-V and Chevrolet Equinox are among the top-selling models in America’s booming crossover segment.
For decades, Japan’s imports of fuel-efficient small cars chipped away at the Detroit Three’s market share. Nowadays, the country’s automakers are sending over hundreds of thousands of hot-selling compact SUVs.
Aside from pickups, the Toyota RAV4 was the top model in America last year.
Hyundai Motor Co. and Kia Motors Corp.’s plants in Alabama and Georgia insulate the companies somewhat from tariffs, but more than half of the vehicles they sold in the U.S. last year were shipped from their home market, according to LMC Automotive.
GM also builds Buick and Chevrolet models in the East Asian nation and sends them to America.
While Germany imported the fifth-most vehicles into the U.S. last year, the home of Europe’s biggest economy punches above its weight in attracting Trump’s ire.
The president has openly lamented the number of Mercedes-Benz logos he sees prowling Fifth Avenue and criticized Germany this week for snubbing American-made Ford vehicles.