Trump’s 25% Tariffs on Imported Vehicles Sink Tata Motors
US President Donald Trump Signs Tariff decision (Image credit White House)
China’s Hang Sang Rises After Trump Unveils Tariffs
By S Jha
New Delhi, March 27: Shares of Tata Motors slumped by almost five per cent on Thursday. US President Donald Trump announced 25 per cent tariffs on imported cars.
The Indian equity market shrugged off initial losses to trade with strong gains. Nifty at one point rose by almost 125 points. Bank Nifty was trading with gains of almost 400 points.
China’s Hang Sang was trading one per cent higher. Chinese BYD is a rival of billionaire Elon Musk’s Tesla in electric cars.
Trump said that tariffs on imported cars will boost domestic manufacturing. He said there will be no tariffs on cars manufactured in the US.
Trump announced a 25 per cent tariff on all imported vehicles and certain automotive parts, effective April 2, 2025. Tariffs will apply to all passenger vehicles. They will also affect specific auto parts, including engines and transmissions, said CNN in a report.
Cadena in a report said that Trump hopes for revenue gains to the tune of $600 billion to $1 trillion over the next two years. It also reported that major automakers, including General Motors, Ford, and Stellantis, expressed concerns.
The automakers of the US have said that tariffs may disrupt global supply chains and also increase production costs. The US bourses tumbled last night with stock prices of automobile companies taking hits.
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“The 25 per cent tariff will be applied to imported passenger vehicles (sedans, SUVs, crossovers, minivans, cargo vans) and light trucks, as well as key automobile parts (engines, transmissions, powertrain parts, and electrical components), with processes to expand tariffs on additional parts if necessary,” said the White House in a statement.
Except for stocks of Tata Motors, others in the sector were not affected in trades on Thursday. Shares of Hero Motors led the gains in Nifty. Shares of Mahindra and Mahindra were trading with minor losses.
Meanwhile, Canada and Mexico, which have significant automotive manufacturing operations, criticized the tariffs. Canadian Prime Minister Mark Carney slammed the decision, saying: It is a direct attack on Canadian autoworkers”.
Wall Street Journal in a report quoted economists warning that “while the tariffs aim to bolster US manufacturing, they may lead to higher vehicle prices”. They also warned of potential retaliation from affected nations, they stated.
Experts stated that Tata Motors’s JLR is majorly manufactured in the UK. But the JLR has a sizable share of electric car market in the US. Tata Motors had previously announced plans to set up manufacturing facilities in the US.
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