In this article7267.T-JP7203.T-JPFFollow your favorite stocksCREATE FREE ACCOUNTVehicles seen on the lot of a Ford auto dealership in Montebello, California on April 1, 2025.Frederic J. Brown | Afp | Getty ImagesDETROIT — President Donald Trump’s 25% tariffs on imported vehicles to the U.S. have taken effect, but the impacts of the new levies on investors and the global automotive industry will play out over the months, if not years, to come.The 25% tariffs are on any vehicle not assembled in the U.S., which S&P Global Mobility reports accounted for 46% of the roughly 16 million vehicles sold domestically last year. The White House has said it also plans to place tariffs on some auto parts such as engines and transmissions, but those are set to take effect no later than May 3.Wall Street analysts and investors have been bearish on the tariffs, which some believe could decimate company earnings and drive the automotive industry into a recession.”A 25% on automotive imports lasting beyond four to six weeks would likely have a chilling effect on the entire sector as [automakers] need to grapple with significant impact to the bottom line,” Bernstein analyst Daniel Roeska said in a recent note to investors.TD Cowen’s Itay Michaeli described the tariffs to investors as “close to the worst case outcome vs. recent expectations,” while Barclays’ Dan Levy said “there are no ‘winners’ in the absolute – only relative winners.”Trump has admitted there may be some “pain” initially with the tariffs, but the president said he believes the actions will bolster American jobs in the long term and result in more than $100 billion of new annual revenue to the U.S.Automakers were lobbying for vehicles and parts that are compliant with Trump’s United States-Mexico-Canada trade agreement to be tariff-free, but so far there have been no exemptions for vehicles.There might end up being caveats for auto parts that are still yet to be finalized, but auto stocks will likely remain volatile, Wall Street analysts warned.As the impacts of the tariffs continue to unfold, investors should be aware of which companies are expected to be most at risk, what vehicles will be impacted and just how much the levies are expected to affect earnings.U.S.-built does not mean U.S.-madeSimply put, no vehicle is completely sourced and produced domestically.Even if vehicles are produced in the U.S. — meaning the final assembly takes place in the country — the tens of thousands of parts for new cars and trucks come from a global supply chain.”We stress that the concept of a U.S. car maker with parts all from the U.S. is a fictional tale that does not exist and would take years to make this concept a reality,” Wedbush analyst Dan Ives said in an investor note Wednesday.For example, Ford Motor’s F-150 is exclusively assembled in the U.S. but has roughly 2,700 main billable parts, which exclude many small pieces, according to Caresoft, an engineering benchmarking and consulting firm. Those parts come from at least 24 different countries, Caresoft said.Ford-150 pickup trucks are displayed for sale at a dealership on March 24, 2025 in Austin, Texas. Brandon Bell | Getty ImagesUltimately, the rollout of the tariffs on auto parts will be key, and could potentially bring some relief for automakers, depending on their supply chain network.Parts that are currently compliant with the USMCA trade deal will be tariff-free, but only until the secretary of commerce and Customs and Border Protection establish processes to impose levies on non-U.S. content.Automakers under USMCA also are expected to have an opportunity to have U.S. content equate to a reduction in their tariff calculation, according to the White House.Automakers most impactedS&P Global Mobility reports Volvo, Mazda, Volkswagen and Hyundai Motor (including Genesis and Kia brands) are the most at risk from a vehicle standpoint, as at least 60% of their respective U.S. sales were imported from outside the U.S. in 2024.Ford, General Motors, Toyota Motor, Honda Motor and Chrysler parent Stellantis produced the most vehicles in the U.S., according to S&P Global Mobility. Those five automakers accounted for 67% of U.S. passenger light-vehicle production in 2024.But Bernstein estimates 57% of the value content in U.S.-assembled vehicles is imported, which means companies such as Ford — the No. 1 U.S. producer of cars and trucks — are still set to be …
