The Latest Administration Tariff Strategies Mean More Scenario Planning for the US Auto Industry

The current administration is adjusting its tariff strategies due to the US Supreme Court decision that the reasoning the administration used to institute tariffs around the world was not legal.  Mike Jackson from MEMA:  The Automotive Supplier Association talked about the new tariff strategies that the administration is implementing at our recent “Effects of the New Administration on the US Auto Industry” conference at the University of Michigan.  As you can see from this slide, there are three main laws the administration can use to impose tariffs.  

What challenges the automotive supplier and manufacturer base is how much each of these tariffs will cost them and when they will go into effect?  Cost in this case is from importing materials, components, or vehicles from around the globe.  But there is another cost internal to the companies that relates to the time companies are taking to plan their response to the tariffs, the cost of changing their supply chain strategy, and the cost of moving production to the US in terms of logistics and labor rates.  None of these costs are paid for by the government, so all suppliers and manufacturers must either increase their pricing for vehicles or components or reduce their profit margins or both.  These are some of the not so hidden costs of the new tariffs that companies absorbed in 2025 and will absorb again in 2026.