Trump’s Auto Tariffs Collide With Production Realities

Photo: REUTERS/Jorge Duenes

President Donald Trump has insisted that automakers and manufacturers can avoid his tariffs by moving production back to the United States, arguing that his trade policies will revitalize domestic industry and create blue-collar jobs. But the reality is far more complicated.

The auto industry, in particular, is already dealing with a wave of tariffs that threaten to increase production costs and car prices. Duties on steel and aluminum imports took effect this week, with tariffs on vehicles from Asia and Europe set to begin next month. The most disruptive and unpredictable of all—import taxes on vehicles and auto parts from Canada and Mexico—has been repeatedly announced and postponed since Trump took office, but is now scheduled to take effect in April.

Automakers Say Moving Production Isn’t That Simple

The administration has dismissed industry concerns, arguing that companies can easily shift production to the U.S. “He told them they should get on it, start investing, start moving,” White House Press Secretary Karoline Leavitt said. “That’s the ultimate goal.” But automakers say moving production isn’t as simple as flipping a switch.

The industry operates on long-term investments that take years to plan and billions of dollars to execute. Ford CEO Jim Farley described Trump’s tariff policies as creating “a lot of cost and a lot of chaos,” while General Motors CFO Paul Jacobson noted that the uncertainty makes major investment decisions impossible. Even repurposing a factory to produce a different model can take a year or more, and building a new plant takes even longer.