Raphael Stevens

President Donald Trump’s 25% tariffs on imported vehicles to the U.S. have taken effect, but the impacts of the new levies could take years to unfold.
In the near term, auto industry investors should expect continued volatility in automaker and supplier stocks, according to Wall Street analysts.
CNBC breaks down what investors should know about how the additional levies will impact individual vehicles and automakers.

Vehicles seen on the lot of a Ford auto dealership in Montebello, California on April 1, 2025.
Frederic J. Brown | Afp | Getty Images

DETROIT — President Donald Trump’s 25% tariffs on imported vehicles to the U.S. have taken effect, but the impacts of the new levies on investors and the global automotive industry will play out over the months, if not years, to come.
The 25% tariffs are on any vehicle not assembled in the U.S., which S&P Global Mobility reports accounted for 46% of the roughly 16 million vehicles sold domestically last year. The White House has said it also plans to place tariffs on some auto parts such as engines and transmissions, but those are set to take effect no later than May 3.

Wall Street analysts and investors have been bearish on the tariffs, which some believe could decimate company earnings and drive the automotive industry into a recession.
“A 25% on automotive imports lasting beyond four to six weeks would likely have a chilling effect on the entire sector as [automakers] need to grapple with significant impact to the bottom line,” Bernstein analyst Daniel Roeska said in a recent note to investors.
TD Cowen’s Itay Michaeli described the tariffs to investors as “close to the worst case outcome vs. recent expectations,” while Barclays’ Dan Levy said “there are no ‘winners’ in the absolute – only relative winners.”
Trump has admitted there may be some “pain” initially with the tariffs, but the president said he believes the actions will bolster American jobs in the long term and result in more than $100 billion of new annual revenue to the U.S.

Automakers were lobbying for vehicles and parts that are compliant with Trump’s United States-Mexico-Canada trade agreement to be tariff-free, but so far there have been no exemptions for vehicles.

There might end up being caveats for auto parts that are still yet to be finalized, but auto stocks will likely remain volatile, Wall Street analysts warned.
As the impacts of the tariffs continue to unfold, investors should be aware of which companies are expected to be most at risk, what vehicles will be impacted and just how much the levies are expected to affect earnings.

U.S.-built does not mean U.S.-made

Simply put, no vehicle is completely sourced and produced domestically.
Even if vehicles are produced in the U.S. — meaning the final assembly takes place in the country — the tens of thousands of parts for new cars and trucks come from a global supply chain.
“We stress that the concept of a U.S. car maker with parts all from the U.S. is a fictional tale that does not exist and would take years to make this concept a reality,” Wedbush analyst Dan Ives said in an investor note Wednesday.
For example, Ford Motor’s F-150 is exclusively assembled in the U.S. but has roughly 2,700 main billable parts, which exclude many small pieces, according to Caresoft, an engineering benchmarking and consulting firm. Those parts come from at least 24 different countries, Caresoft said.

Ford-150 pickup trucks are displayed for sale at a dealership on March 24, 2025 in Austin, Texas. 
Brandon Bell | Getty Images

Ultimately, the rollout of the tariffs on auto parts will be key, and could potentially bring some relief for automakers, depending on their supply chain network.
Parts that are currently compliant with the USMCA trade deal will be tariff-free, but only until the secretary of commerce and Customs and Border Protection establish processes to impose levies on non-U.S. content.
Automakers under USMCA also are expected to have an opportunity to have U.S. content equate to a reduction in their tariff calculation, according to the White House.

Automakers most impacted

S&P Global Mobility reports Volvo, Mazda, Volkswagen and Hyundai Motor (including Genesis and Kia brands) are the most at risk from a vehicle standpoint, as at least 60% of their respective U.S. sales were imported from outside the U.S. in 2024.
Ford, General Motors, Toyota Motor, Honda Motor and Chrysler parent Stellantis produced the most vehicles in the U.S., according to S&P Global Mobility. Those five automakers accounted for 67% of U.S. passenger light-vehicle production in 2024.
But Bernstein estimates 57% of the value content in U.S.-assembled vehicles is imported, which means companies such as Ford — the No. 1 U.S. producer of cars and trucks — are still set to be significantly impacted by the tariffs.
Among the Detroit automakers, Bernstein reports GM faces the highest exposure to tariffs, driven by its more than 80% North America revenue share, 48% vehicle import rate, and less than 40% U.S. parts content in domestic builds.

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Bernstein estimated GM’s earnings before interest and taxes could drop 79% as a result of the tariffs, an 81% decline in earnings per share and a $4.1 billion hit to free cash flow.
That compares with Bernstein’s estimates for Ford of a 16.5% hit to EBIT, 23% decline in EPS and 36% drop to free cash flow.
Stellantis, Bernstein estimates, is least affected, with only 40% of global revenue from the U.S. and 56% local parts content, resulting in a roughly $1 billion EBIT impact, 8.75% lower net income and a roughly $540 million hit to free cash flow.
Excluding potential tariffs on parts, U.S. electric vehicle leader Tesla as well as EV startups Rivian Automotive and Lucid Group are far better positioned. All of their vehicles sold in the U.S. have final assembly in the country.
“Tesla is the clear structural winner: localized, strong market share, better insulated from trade risk. For everyone else, this is a margin reset and real drag on near-term earnings power,” Bernstein’s Roeska said.

U.S. auto sales

U.S. auto sales in the first quarter came in well above industry expectations, as consumers flocked to buy new vehicles ahead of the tariffs taking effect, which many expect to result in higher vehicle prices.
“Along with increasing costs for importing vehicles, costs will increase for auto manufacturing in the US, and consumer costs for vehicles will increase,” S&P Global Mobility said in a tariff report last week.
S&P expects U.S. light-vehicle sales could migrate to between 14.5 million and 15 million units annually in the coming years, if the tariffs remain in effect. That compares with roughly 16 million vehicles sold in 2024.

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Entry-level, less expensive vehicles are most at risk of being cut or seeing price increases, according to Wall Street and industry analysts. That’s because automakers often have tried to produce such vehicles, which historically have small profit margins, in lower-cost countries to the U.S.
For example, GM imported more than 400,000 entry-level crossovers for its Buick and Chevrolet brands last year from South Korea, tariff-free. The company has touted the vehicles as being the pinnacle for the automaker’s profitable growth in lower-margin, entry-level vehicles.
Other entry-level or more affordable vehicles that are set to be tariffed include the Toyota RAV4 and Honda CR-V from Canada as well as the Ford Maverick, Ford Bronco Sport and Chevrolet Equinox from Mexico.
Bank of America estimates new vehicle prices — which currently run an average of about $48,000 — could increase as much as $10,000 if automakers pass the tariffs on impacted vehicles in full on to consumers.
Automakers have largely been silent on how much they intend to increase vehicle prices due to the new auto tariffs, as well as additional levies on parts, aluminum and steel — if they raise prices at all.
“We continue to evaluate all of the scenarios,” Hyundai Motor North America CEO Randy Parker said Tuesday about potential price increases. “But what I would say to our customers is that, just like all things in life, tomorrow is never guaranteed. And if you’re interested in buying a car, right now is a great time to buy a car, because as of today, we haven’t [risen] prices.” More

Advertisers are seeking more flexible terms as they try to parse how President Donald Trump’s new tariffs will affect their businesses.
Companies often pull back on advertising and marketing spending during periods of economic uncertainty.
The tariffs on imported goods into the U.S. come weeks before media companies plan to court advertisers during their annual Upfront presentations.

Big brands that have in some cases sat out for years the TV advertising frenzy around the biggest US sporting event — the Super Bowl — are returning Sunday and spending big amid record ad prices. It’s been a bumpy couple years marked by pandemic-era restraint and political polarization, but the American football championship offers an increasingly unequalled viewership too big to pass up.
Olivier Douliery | AFP | Getty Images

Brands and advertisers are seeking flexible terms as they face uncertainty about how President Donald Trump’s new tariffs will affect their businesses.
The push for more lenient agreements, in which companies could pivot budgets quickly or shift their focus to different types of marketing as they react to the duties, has been the focus of conversations between media companies and advertisers in recent weeks, according to people close to the discussions.

President Donald Trump announced he would put minimum 10% tariffs on all imports into the U.S., with far steeper duties on dozens of countries including China and Vietnam. The scarcity of specifics in recent weeks, and sometimes contrasting messages coming from the White House, have fueled conversations about flexibility between chief marketing officers and media executives, the people said.
“In this period of uncertainty, we’re seeing a significant shift toward more flexible, performance-based advertising models that allow brands to adjust spending quickly if conditions change,” said Jonathan Gudai, CEO of Adomni, an artificial intelligence-powered programmatic video-everywhere advertising platform. Buying ads programmatically, or through digital platforms, has taken up an increasingly large part of ad spending, and using AI tools are now often part of the process.
Unsteadiness in the economy often mean companies pull back on spending for advertising and marketing. The potential hit to the ad market underscores the ripple effect of tariffs on companies that won’t directly contend with heightened costs on products.
Tariffs aren’t the only factor causing advertisers to rethink their budgets, said Kate Scott-Dawkins, global president of business intelligence of GroupM, WPP’s media investment group.
“We were pretty bullish in our December forecast on [ad spending] growth for the U.S. I think we’ll probably end up curbing that in the June forecast, based on the confluence of impacts,” said Scott-Dawkins. “From the rising inflation plus layoffs and unemployment plus the impact of tariffs. I think it’ll be all those things together that lead to a reduction in our expectations for the year.”

GroupM forecast spending in the U.S. ad market to grow 7% in 2025, after totaling $379 billion in ad revenue in 2024, excluding political advertising, according to a recent report.
For media companies, the uncertainty also comes soon after they contended with tightened ad budgets during the height of the pandemic.
In some regards, advertising has stabilized for many media companies since the pandemic — especially for streaming platforms and those with live sports rights. But traditional TV networks still face lower advertising revenue as consumers shift away from the standard bundle of cable channels, and digital platforms and streaming gobble up a larger share of ad budgets.
Some advertising categories such as autos haven’t rebounded, however, and companies are unsure what tariffs will mean for spending, the people said. Conversations with chief marketing officers at automakers have been frequent, they added. Trump has announced 25% tariffs on cars and some auto parts not made in the U.S.
The tariffs also come weeks before Upfront presentations, when media companies make their annual pitch to advertisers.
“Everything I hear about Upfronts and the state of overall trading in the ad world is that it’s cautious,” said Jonathan Miller, CEO of Integrated Media, which specializes in digital media investments. “There’s much more demands for flexibility, and while it’s not recessionary, there’s a slight holding back…meaning a couple of percentage points of overall growth. Enough that is felt.”
Gudai of Adomni added that traditional TV will be one of the areas most vulnerable to ad budget cuts, but brands will also have to broaden their focus when it comes to competing for customers who could face higher prices on goods.
“Tariffs potentially create a dual impact — increased costs that may squeeze advertising budgets, but also greater need for targeted advertising as brands compete on factors beyond price,” Gudai said.
While media executives are open to offering flexibility, they’ve also been reminding brands that advertising during tough economic times can build brand awareness and help businesses long term, the people said.
Some brands are better served not cutting back on ad spending, too, especially if they don’t have brick-and-mortar stores or ways outside of marketing to get in front of potential customers. Scott-Dawkins said for some companies it’s still worth spending on TV ad spots since it’s still considered the most effective way to reach consumers.
“When every dollar is under scrutiny, brands have to do more than just sell—they have to connect. Purpose-driven marketing isn’t a ‘nice to have’ anymore; it’s how brands earn trust and build lasting relationships,” said Andre Banks, founder and CEO of NewWorld, a marketing and strategy consultancy. “In uncertain times, consumers gravitate toward companies that stand for something real. Advertisers who recognize this will be the ones who don’t just survive the downturn but come out stronger on the other side.” More