US carmakers lose big in latest trade war escalation | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Despite the disruption they’ve caused, U.S. car manufacturers have all praised the 25% auto tariffs that the White House announced in April.

Foreign automakers have taken over the U.S. industry in recent decades.

The U.S. auto industry peaked in the 1970s, producing about 10 million vehicles annually.

Despite the population growing by more than 60% since then, car manufacturers produced just 10.6 million vehicles in the U.S. in 2023.

While General Motors still has the highest market share at 17% and Ford ranks third with a 13% market share, foreign models from Asia round out the top five, according to Cox Automotive data.

General Motors CEO Mary Barra and Ford CEO Jim Farley have both praised President Donald Trump’s tariffs.

“For decades now, it has not been a level playing field for U.S. automakers globally, with either tariffs or non-tariff trade barriers. So I think tariffs is one tool that the administration can use to level the playing field,” Barra said.

Meanwhile, Ford ncreased sales in the first half of the year 6.6% to 1.11 million units. Even its struggling EV lineup saw a nearly 15% increase to 156,509 units. Total vehicle sales in the second quarter were up more than 14%, thanks in part to the tariffs.

But President Trump’s latest move could upend all the progress domestic manufacturers have made.

U.S. car manufacturing could get more expensive soon.

Image source&colon; Anna Barclay/Getty Images

White House explores copper tariffs that could sink U.S. auto industry

Last week during a cabinet meeting, President Trump threatened a 50% tariff on copper imports, a move that could make it harder for carmakers and suppliers that already face slim margins due to tariffs.

The U.S. already has 50% tariffs on imported aluminum and steel, increasing manufacturing costs for automakers in the process.

Analysts have estimated that those tariffs could add $1,000 or more to the cost of each vehicle. Car makers have been relying on their stockpiles to serve customers without raising prices, but inventories are being exhausted.

Now, the copper tariffs could tip the scales even more.

U.S. copper prices rose to a record of $5.682 a pound or $12,526 per metric ton. Meanwhile, the same metal is trading for $9,600 on the British exchange.

The price of delivery has also tripled to 60 cents a pound since President Trump’s inauguration.

According to estimates from Cox Automotive and Benchmark Mineral Intelligence, carmakers are already paying an average of $1,700 in tariffs for every car they import.

With copper tariffs in place, tariffs could add as much as $5,700 for every car imported from places other than Canada and Mexico.

The president hasn’t officially set a date for when the tariffs will take effect.

U.S. dealers rely on incentives to get customers to buy

Auto sales have climbed sharply in recent months, as consumers were motivated by the incentives and the need to buy vehicles before any tariff-related price increases.

But Bank of America is now saying that the growth it saw in consumer vehicle loan applications has declined from its peak in April, “suggesting that ‘buying ahead’ has largely run its course.”

Bank of America expects lower-income and younger buyers to feel the most pain, as its data shows that median car payments have grown faster than new and used car prices since 2019.

Shockingly, of those households with a monthly car payment, 20% have a payment over $1,000.

In addition to capping your car payments at about 15% of your monthly take-home, financial experts also recommend shoppers aim for a 20% down payment, a 36- to 48-month loan term, and expenses (including insurance) at between 8% and 10% of your gross monthly income.

Experts also recommend that you know your credit score and loan approval amount in advance and that you shop around with different lenders for the best rate.