Voices of concern about backlash are growing within the United States regarding the ongoing tariff measures imposed by President Donald Trump. Recently, as prices have started to rise again, it is argued that tariffs on imported goods could further provoke inflation. The automobiles for which President Trump has indicated tariffs involve a considerable volume imported from overseas.

On March 14, President Trump said at a signing ceremony for an executive order at the White House, “We will likely impose tariffs on imported cars starting April 2.” The United States has a gigantic automobile market with over 10 million new cars sold annually, but not all vehicles are produced in the U.S.

The site of the 2024 LA Auto Show, which opened in November last year at the Los Angeles Convention Center. A photo of Hyundai's first large electric sports utility vehicle (SUV), Ioniq 9, is displayed at the entrance of the event. /Courtesy of Hyundai

According to the annual sales figures released by major automakers last year in the U.S., General Motors (GM) ranked first with 2,689,346 units sold, followed by Toyota with 2,332,623 units.

According to Samsung Securities, Toyota's production share in the U.S. accounts for only 54.7% of its total sales. Nearly half of the volume is manufactured overseas in countries like Japan and then imported to the U.S. General Motors, an American automotive company, also has a production share of around 67% in the U.S. GM has production facilities in Mexico, where labor costs are lower, and it also produces small sport utility vehicles in South Korea for sale in the U.S.

Last year, Hyundai Motor Group, which ranked fourth in U.S. sales, also has a production share of 41.9% in the U.S. Of the 911,805 units sold by Hyundai, 361,632 were produced at its Alabama plant. Kia sold 796,488 units, of which only 354,100 were made at its Georgia plant.

President Trump announced a policy to impose a 25% tariff on Mexico but suspended it for a month. The photo shows Kia employees taking commemorative photos at the ceremony for the production of the 2 millionth vehicle and K4 at the Mexico plant. /Courtesy of Kia

Since nearly half of the brands significantly represented in the U.S. automobile market are produced overseas, if President Trump imposes tariffs on imported cars, the prices of new vehicles will inevitably rise.

In early February, President Trump signed an executive order to impose a 25% tariff on all imported goods from Canada and Mexico, which was subsequently delayed for a month. There are factories producing automotive parts in Mexico from various countries, including South Korea. He also announced that starting next month, a 25% tariff would be imposed on imported steel without exception.

According to the U.S. Department of Labor, last month, the Consumer Price Index (CPI) in the U.S. rose by 3% compared to the same month last year. The shares of new vehicles and used cars/trucks in the overall CPI composition are 3.6% and 1.9%, respectively. Automotive insurance accounts for 2.9%, while vehicle repair costs account for 1.2%.

An industry source in the automotive sector noted, “The overall share of automotive-related items in the CPI is about 10%,” adding that “with criticism of rising prices increasing in the U.S., President Trump is facing greater pressure to impose tariffs.”