Price hikes on horizon as US tariffs squeeze American automakers

Tariffs on imported parts and materials are costing American automakers billions of dollars, despite the vehicles being built in the U.S. General Motors, Ford, and Stellantis have all reported significant financial losses directly attributed to these duties. GM’s second-quarter net income dropped by 35%, with tariffs costing it $1.1 billion and an estimated total annual impact of $4-5 billion. Ford’s second-quarter tariff costs were $800 million, and the company is projecting a $3 billion hit for the year. Similarly, Stellantis has lost hundreds of millions.
These tariffs are adding an estimated $2,000 to $3,000 to the cost of each vehicle, a burden that automakers have largely absorbed to keep prices stable for consumers. However, analysts believe that price hikes are likely coming soon. The situation is also hindering automakers’ ability to invest in new U.S. production facilities, as the high costs and unpredictable nature of the tariffs make such long-term investments a risky bet. In many cases, it remains cheaper for suppliers to pay the tariffs than to relocate their operations to the United States.

Credit: CGTN