The President has not indicated that tariffs levied against China could be paused like those against Canada and Mexico
February 7, 2025 at 09:23
- Both the Lincoln Nautilus and Buick Envision are built in China and sent to the US.
- Approximately $15-20 billion in Chinese-made car parts are exported to America.
- China has a particularly strong grasp on the market for electric vehicle batteries.
Tariffs have been making plenty of headlines lately, with President Donald Trump first imposing, then pausing, duties on imports from Mexico and Canada. But the latest round, a new 10% tariff on Chinese imports, is poised to shake up the U.S. auto industry as well.
While relatively few new vehicles are shipped directly from China to American dealerships, the bigger concern is the flood of Chinese-made auto parts that keep the industry running.
The two car manufacturers that will feel the immediate adverse effects of these 10% tariffs are General Motors and Ford, two of America’s most important companies. Lincoln builds the Nautilus in China and GM also builds the Buick Envision in China. Last year, 83,884 Nautilus and Envision models were sold in the United States, representing 95% of all Chinese-built cars sold in the US.
Read: Automakers Breathe Easier As Trump Freezes Tariffs For 30 Days
Volvo and Polestar also build vehicles in China and export them to America. These four brands haven’t said if the tariff will force them to make production changes or tweak pricing, but in all likelihood, they will.
“It’s mainly GM and Ford that are really hit from a volume standpoint,” GlobalData vice president of automotive research Jeff Schuster said. “Our domestic guys are the ones taking the brunt of this, at least for full vehicles … but it can be muted to some extent.”
America Needs Chinese Auto Parts
Then there’s the matter of auto parts, notes CNBC. According to Goldman Sachs analyst Mark Delaney, tariffs placed against automotive parts will have a much more significant impact on the economy.
“While vehicle imports are minimal from China, auto parts imports are about ~$15-20 bn per year per the US International Trade Commission, and China is a key part of the battery/storage supply chain (especially LFP batteries used in utility scale energy storage),” he said.
Many electrified vehicles sold in America contain a significant percentage of components sourced from China, according to data from the National Highway Traffic Safety Administration, as discovered by CNBC. Hyundai and Kia models are among the most reliant, with the Hyundai Kona EV leading at 50%, followed by the Hyundai Ioniq 5 N (30%), Kia EV9 (35%), and Kia Niro Electric (25%). Nissan’s Ariya EV isn’t far behind, with 40% of its components coming from China. Other notable models include the Genesis G80 EV (25%), Volkswagen ID Buzz EV (25%), and Toyota’s bZ4x EV and RAV4 PHEV, each at 20%.
