Catastrophic Impact of Trump's Tariffs on Automakers

The automotive industry is facing a crisis due to Trump's imposition of a 25% tariff on car imports and parts. This will inevitably lead to price hikes for numerous vehicles and their components, impacting the global market, not just the United States. Many cars sold in the Arab market, for example, are manufactured or assembled in supply chains directly linked to the U.S., Europe, and China. As a result, prices for U.S.-imported cars are bound to rise, or some models may disappear from markets. The availability of spare parts will also be affected, as American companies face increased costs for imported parts, leading to higher export tariffs. Is this truly the "beginning of America's golden age" as Trump claims?

Volkswagen's Response to Increased Tariffs

Volkswagen has confirmed it will impose additional costs on cars exported to the U.S. According to a memo sent to its U.S. dealers, the automaker plans to reduce sales incentives and has halted rail shipments from its Mexican plants to the U.S., although sea shipments continue.

Volkswagen intends to keep tariff-affected cars at ports "in the short term." Dealers have been informed that prices for cars manufactured and imported in the U.S. will be affected. In a statement, Volkswagen emphasized its commitment to "complete transparency during this period of uncertainty."

The company emphasized prioritizing their dealers and customers and will share their strategy once they determine the impact on their business.

Stellantis Halts Production Temporarily

To mitigate negative effects, Stellantis announced it will shut down its Ontario plant for two weeks starting Monday, April 7. Its Toluca plant in Mexico, employing 2,600 people, will close for at least April. The automaker also plans to lay off about 900 employees in Michigan and Indiana.

In a statement, Stellantis said it will monitor the situation to assess whether further actions are necessary and continues evaluating the impact of recently announced U.S. tariffs on imported vehicles.

Ford's Strategy for New Tariff Policies

Ford is extending employee pricing under Trump's new tariffs through its "From America, For America" program effective April 3 until June 2. Models like the F-150 and Maverick are included alongside select Lincoln vehicles.

However, some models like the 2025 Ford Expedition and Lincoln Navigator are excluded from discounts, as well as high-performance vehicles such as Raptors and special Mustangs and Broncos.

Ford CEO Jim Farley stated previously that tariffs would " blow a hole in the U.S. industry that we have never seen."

General Motors' Stance on Tariffs

General Motors has not issued an independent response but released a statement through the American Automotive Policy Council (AAPC), which also represents Ford and Stellantis:

"We continue to believe that vehicles and parts that meet the USMCA’s stringent domestic and regional content requirements should be exempt from the tariff increase. Our American automakers, who invested billions in the U.S. to meet these requirements, should not have their competitiveness undermined by tariffs that will raise the cost of building vehicles in the United States and stymie investment in the American workforce, while our competitors from outside of North America benefit from easy access to our home market"

Impact on Gulf Markets from Trump's Decisions

Ultimately, U.S. tariffs on imported vehicles and parts will affect global markets including GCC countries. As manufacturers like Volkswagen, Ford, and Stellantis adjust prices or halt production or delay shipments, vehicle availability and cost will be directly impacted. Gulf countries rely heavily on international supply chains with many imported vehicles linked to American brands or parts; they face price increases, delays in new model arrivals, and higher maintenance costs. This shift highlights how policies aimed at boosting American industry may unintentionally destabilize global auto markets—particularly those heavily dependent on imports such as GCC nations.