US President Donald Trump is introducing a 90-day tariff break for the EU, but cars and spare parts for them are not exempt. China, Canada and Mexico are not exempt either.
US President Donald Trump has announced a temporary change in the country's tariff policy. A general 90-day tariff break will be introduced for most goods from many countries, including the EU. It will be replaced by a base tariff of 10 percent.
However, this pause does not apply to cars and auto parts. Here, existing or potential tariffs will remain in place. Trump has previously threatened high tariffs specifically on cars from the EU.
The decision to suspend tariffs was announced at a White House press conference. Trump specified that tariffs on Mexico and Canada, both countries that export a lot of cars to the US market, will remain in place.
China is a different story. The country is already hit by high US tariffs. Since August 1, 2024, Chinese cars have been subject to a 100 percent tariff.
Reuters writes.
Trump explained at the press conference that China will now also be subject to an extra high tariff of 125 percent on other goods.
This is in response to China retaliating against the US's original 104 percent tariff on Chinese goods. The result is that there are effectively no car exports from China to the US.
However, the news of a general tariff break raises a glimmer of hope in the automotive industry. The industry hopes that tariffs on cars and spare parts can eventually be reduced or eliminated altogether.
Car duties affect prices and industry
Leading figures in the U.S. auto industry have been working to avoid tariffs on auto parts, including Ford CEO Jim Farley, who has argued that tariffs would cause major disruptions to supply chains.
However, Trump opened a door ajar during the press conference. He said he would consider exempting individual companies from the tariffs.
"We will take a look at it," the president said.
He added that he would decide which companies should be exempted "instinctively."
Fears of price increases due to tariffs remain. Patrick Anderson, CEO of consultancy Anderson Economic Group, maintains his previous estimates of what tariffs will mean for car prices.
Anderson expects that the tariffs will make the cheapest cars between 17,500 and 35,000 kroner more expensive. For more expensive cars, the price increase could reach up to 140,000 kroner. Such price increases could significantly affect sales.
The stock market reacts positively
The market immediately reacted positively to the news of the general tariff break. The US stock market, as measured by the S&P 500 index, rose by 9.5 percent. The increase offset a large part of the losses the index had suffered in recent days.
Shares of automakers and subcontractors also saw significant increases. Ford shares rose 9.3 percent.
General Motors' stock rose 7.7 percent. Tesla's stock saw the biggest increase, up 22.7 percent.
This shows that investors see the easing of tariff pressure as positive news. This is true even though the automotive industry is not yet directly covered by the tariff break. Uncertainty about future tariffs on cars and parts remains.
Customs duties and potential price increases can have a major impact on the car market. This also applies to the many enthusiast cars and special models that we often write about here at Boosted.dk.
In fact, the famous talk show host and car enthusiast Jay Leno has interceded for classic cars and very special cars, but so far without success.
The same can be said about new Chinese cars. Not only do the country's cars have to fight a 100 percent tariff in both Canada and the United States. Russia also imposes tariffs, especially on the communist regime's electric cars. Read more about it here .
