The Good News For India Hidden In US Auto Tariffs
- Anupam Manur
- Mar 27, 2025, 21:24 IST IST
Yes, auto parts companies will be especially hit. But a combination of globally competitive manufacturers & a clever Indo-America trade deal can still create winning market conditions
Trump has continued his assault on global trade by introducing a new set of tariffs on March 26. This time, he has turned his attention to the automobile sector and slapped 25% tariffs on automobile and auto parts imports, which will come into effect on April 3. This was supposedly done to aid the ailing US automobile sector, which was ironically dealt a huge blow in Trump’s first term. The US auto industry, which has been gradually losing its sheen for a while now, suffered when key inputs – steel and aluminium – became more expensive due to Trump’s tariffs.
Global carmakers fret | This move is bound to have far-reaching global consequences, starting with US. Nearly half of the 16mn cars sold in US are imported, and American customers will now have to fork out more for a new car. With the new tariffs making it more expensive to produce and sell cars in US, as well as making imports expensive, American customers will be left with higher prices and fewer choices. Already, stocks of automobile companies in Japan, South Korea, Germany and India have fallen sharply in anticipation of disruptions to their exports to US. Tellingly, US automobile stocks, such as General Motors and Ford, too crashed, indicating they will be affected by higher tariffs on automobile parts.
Global carmakers fret | This move is bound to have far-reaching global consequences, starting with US. Nearly half of the 16mn cars sold in US are imported, and American customers will now have to fork out more for a new car. With the new tariffs making it more expensive to produce and sell cars in US, as well as making imports expensive, American customers will be left with higher prices and fewer choices. Already, stocks of automobile companies in Japan, South Korea, Germany and India have fallen sharply in anticipation of disruptions to their exports to US. Tellingly, US automobile stocks, such as General Motors and Ford, too crashed, indicating they will be affected by higher tariffs on automobile parts.
