Trump Signals Possible Auto Tariff Hike to Boost U.S. Manufacturing

President Donald Trump indicated Thursday that a rise in auto tariffs may be coming soon, suggesting the move could pressure automakers to accelerate U.S.-based production. Speaking during a White House event, Trump said, “I might go up with that tariff in the not too distant future. The higher you go, the more likely it is they build a plant here.”

Trump’s comments come amid ongoing talks with automakers who have been urging the administration to ease the 25% tariffs currently in place. Domestic manufacturers, including the Detroit Three, have criticized a recent agreement that cuts tariffs on British imports while leaving tariffs on Canadian and Mexican vehicles untouched.

Highlighting recent corporate investments, Trump pointed to General Motors' announcement this week to allocate $4 billion across three U.S. manufacturing facilities and shift some SUV production from Mexico to the United States. He also referenced Hyundai’s $21 billion investment plan, which includes a new steel plant in the U.S.

“They wouldn’t have invested 10 cents if we didn’t have tariffs, including for manufacturing American steel, which is doing great,” Trump claimed.

Last month, Mexican officials confirmed that U.S.-bound vehicles assembled in Mexico will generally face a 15% tariff—rather than the full 25%—due to U.S. credits for domestic content in the production process.

However, automakers are already feeling financial strain due to existing tariffs. Ford Motor Company and Subaru of America have both raised prices on select models to offset increased production costs. Ford recently projected a $1.5 billion hit to its adjusted earnings this year because of tariffs.

General Motors reported a current tariff exposure between $4 billion and $5 billion, with around $2 billion stemming from vehicles imported from South Korea—primarily entry-level Chevrolet and Buick models.

Trump’s comments have left automakers on edge, as many are already dealing with rising costs from existing tariffs. Any additional hikes could force tough decisions about where to build future models and how to manage global supply chains.

Also Read: Who Really Pays for Trump’s Tariffs? How Rising Prices Impact Consumers and Businesses in 2025