The Trump administration’s tariffs will cost the auto industry about 20 percent of its profit margin this year, according to new research from Moody’s Ratings. That translates into a roughly $30 billion hit.
The body blow comes as carmakers try to navigate a series of challenges, including stiff competition from China and the transition to electric vehicles. Carmakers also are adjusting to the end of federal tax credits and other financial assistance that was intended to spur American EV manufacturing.
The full impact of the tariffs hasn’t been felt yet either, since the U.S. is still negotiating with major trade partners including Canada, Mexico and South Korea.
Despite the headwinds, car sales have boomed this year. Most companies have avoided raising their vehicle prices since the tariffs took effect, but it’s unclear how long they can keep it up.
