While the ability to maneuver in any circumstance is essential, stability is the foundation of any successful business.
The automotive industry has experienced anything but stability since President Donald Trump took office.
💵💰Don’t miss the move: Subscribe to TheStreet’s free daily newsletter 💰💵
The messaging around the administration’s auto tariffs has been mixed, to say the least.
Last month, President Trump gathered the CEOs of some of the country’s top automakers on a call, warning them not to raise car prices in response to tariffs that were going into effect, the Wall Street Journal reported, citing multiple people with direct knowledge of the call.
Related: Forget tariffs; used car buyers have another reason to worry about prices
Trump instead insisted that his 25% tariff on all imported vehicles, and, presumably, the subsequent retaliatory tariffs placed on American exports in response, were a good thing and that the White House would look unfavorably on carmakers that raised prices.
Days after the report was published, President Trump told NBC News that he “couldn’t care less” if automakers raised their prices and denied the Journal report.
When asked about his message to automakers, Trump said, “The message is ‘congratulations.’ If you make your car in the United States, you’re going to make a lot of money. If you don’t, you’re going to have to probably come to the United States because if you make your car in the United States, there is no tariff.”
Image source: Morris/Bloomberg via Getty Images
Will Ford defy the White House?
Despite his insistence that tariffs are beneficial to the automotive industry, this week, President Trump said he was considering exempting the auto industry from his sweeping tariff plan, at least temporarily.
He told reporters Monday that automakers “need a little bit of time” to onshore their production capacity, CBS News reported.
In this uncertain environment, Ford, one of America’s Big 3 automakers, is keeping its options open.
While the Blue Oval plans to offer steep discounts across its lineup through June 2, it is leaving the door open to increase pricing on new models produced in May, according to a memo seen by Reuters.
“In the absence of material changes to the tariff policy as articulated to date, we anticipate the need to make vehicle pricing adjustments in the future, which is expected to happen with May production,” Ford executive Andrew Frick said in the memo.
Of its fellow Big 3 automakers, Stellantis and GM, Ford is probably best positioned to take on Trump’s tariffs, since it produces about 80% of the vehicles it sells domestically in the U.S.
Different automakers have different strategies to navigate tariffs
The Japanese auto sector represents 20% of all the country’s exports, according to a U.N. report this year. The report estimates that Japan could lose $17 billion in “export potentials in the U.S.” due to the new duties.
Japan exports about $41 billion worth of cars to the U.S. annually.
Related: Tesla Cybertruck owners are going to hate Tesla’s latest move
Last week, Mazda sent a letter to its U.S. dealers informing them that it would not raise its sticker prices or tack on import fees for any vehicles already on dealership lots or that will come into the country before May 1.
Despite Mazda having a plant near Huntsville, Alabama, that only makes up about 20% of the vehicles you see on American roads. Most of the Mazdas sold in the U.S. are built in Japan and Mexico.
But another Japanese automaker is taking a different approach.
More Automotive news:
- Tesla, Elon Musk make drastic decision amid U.S.-China trade war
- Another Japanese automaker takes action on tariffs
- Here’s what car buyers can expect from latest auto tariffs
Mitsubishi will hold its vehicles in port for the foreseeable future instead of offloading them and being forced to pay duties.
“We have sufficient stock on the ground at dealers for the moment to not impact customer choice,” the company told Automotive News.
Mitsubishi Motors North America sold 109,843 vehicles in the U.S. in 2024, a 25.8% year-over-year increase and the brand’s best performance since 2019.
Related: Veteran fund manager unveils eye-popping S&P 500 forecast
