US President Trump announced the launch of the "Liberation Day" economic policy, imposing a 25% import tariff on all non-US manufactured vehicles and parts. This measure has triggered global supply chain disruptions and placed significant pressure on domestic automakers and consumers. According to financial media Kobeissi Letter's analysis, this is not just a trade strategy but potentially a turning point in the automotive market.

Imposing 25% Tariffs on Non-US Manufactured Vehicles, Market Concerns Escalate

Yesterday, Trump's executive order officially imposing 25% tariffs on non-US manufactured vehicles was finalized, causing market turbulence. The three major US stock indices fell across the board, reflecting investors' concerns about the tariff impact.

Kobeissi Letter pointed out that the tariff policy not only affects the automotive industry but could also push up inflationary pressures and undermine consumer confidence, increasing market sensitivity to supply chain cost increases. The report cited various data, suggesting that this tariff impact may be just the beginning, and the market has not yet fully digested its long-term effects:

Theoretically, this will increase the average price of new cars sold in the US but not manufactured there by $12,500.

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Tariffs Expand Comprehensively: Not Just Vehicles, Parts Also Difficult to Escape

First, this new policy not only targets complete vehicles but also includes automotive parts. Even if assembled in the US, if parts are sourced from overseas, tariff costs must still be borne:

Taking Tesla as an example, although the brand assembles cars within the US, 25 to 40% of its parts rely on imports, making it unable to escape the tariff war.

Moreover, major US automakers like Ford, General Motors (GM), and Stellantis, which heavily depend on assembly and parts supply from Canada and Mexico, will also be inevitably affected. This led to a subsequent drop in related automotive stocks after the policy's announcement.

Cost Transferred to Consumers: Prices Soar, Sales Slow

Kobeissi Letter noted that the current average price of new cars in the US is close to $50,000, and with a 25% tariff, each vehicle could increase by up to $12,500, with a particularly significant impact on mid-to-low-end and entry-level models.

The luxury car market is also not spared. Italian supercar manufacturer Lamborghini, which does not assemble in the US, will see its Revuelto model's price increase by approximately $175,000, from its original price of $604,000.

Cox Automotive estimates that in the first week of implementation, the policy could cause up to 30% production interruption and trigger a chain reaction of rising used car prices and reduced new car discounts, ultimately transferring costs to consumers.

White House Calculations and Risks: Significant Tax Revenue, but High Cost

Based on the current US automotive import value of $275 billion, the tariff expenditure will be equivalent to 0.25% of GDP. Undoubtedly, this also puts pressure on trade relations between the US and major exporting countries like the UK: "The UK exports nearly $10 billion to the US automotive market annually, becoming one of the first victims."

Automobiles are the largest export product from the UK to the United States, with the White House estimating that this tariff policy could generate up to $100 billion in annual tax revenue. The question is, who will foot the bill?

Worryingly, Trump has repeatedly emphasized that this will become a "permanent policy," demonstrating his determination to promote manufacturing reshoring. The report warns that US stocks have not yet fully reflected long-term risks, and volatility may intensify in the future.

Automotive Industry and Consumers Facing Challenges Together

As the policy is about to be implemented, the automotive industry may face pressure to restructure, with car manufacturers needing to accelerate localization of supply chains, while consumers may be trapped in a situation of soaring car purchase costs. Kobeissi Letter suggests that market volatility will significantly increase in the coming weeks, and both investors and consumers should prepare in advance.