Tariffs and Trade Disruptions: A Comprehensive Overview of Automotive Industry Developments

Strategic Insights -

Tariffs imposed by the US and other countries have been causing disruptions in the automotive industry, leading to increased costs and uncertain market conditions. Partner John Turlais of Foley & Lardner shared insights on the US-Mexico-Canada trade agreement in the Milwaukee Business Journal, while partner Gregory Husisian joined the Logistics Management podcast to discuss the evolving international trade landscape. As a result, U.S. tariffs on steel and aluminum imports now apply to an estimated $328 billion worth of goods, with the expanded derivatives list including goods that may impact the cost of certain auto components.

Key Takeaways:

  • U.S. tariffs on steel and aluminum imports now apply to an estimated $328 billion worth of goods, up from $191 billion.
  • The expanded derivatives list includes goods that may impact the cost of certain auto components.
  • Major automakers have collectively incurred $12 billion in tariff-related costs through second quarter 2025.
  • Hyundai raised its planned investments in the U.S. to $26 billion through 2028, from a previous target of $21 billion, to support vehicle production, the construction of a steel mill, and the establishment of a robotics innovation hub.
  • Cleveland-Cliffs Inc. signed fixed-price contracts to supply steel to multiple U.S. automakers for up to three years.
  • Noveon Magnetics Inc. secured a multi-year supply agreement to provide rare-earth magnets for GM's full-size pickup trucks and SUVs.
  • Ford will invest $2 billion to retool a Louisville, Kentucky plant to build a new line of affordable EVs, beginning with a $30,000 electric pickup truck expected to launch in 2027.
  • GM plans to import batteries from China's Contemporary Amperex Technology (CATL) for the second generation of Chevrolet Bolt EVs for roughly two years.

Statistics:

  • $328 billion: Estimated value of U.S. tariffs on steel and aluminum imports.
  • $191 billion: Previous value of U.S. tariffs on steel and aluminum imports.
  • $12 billion: Major automakers' collective tariff-related costs through second quarter 2025.
  • $26 billion: Hyundai's planned investments in the U.S. through 2028.
  • $21 billion: Hyundai's previous target of investments in the U.S.
  • $9.5 billion: Toyota's expected reduction in operating profit from U.S. import duties.
  • 1.4 trillion yen: Toyota's expected reduction in operating profit from U.S. import duties (in yen).

Sources:

  • Tariffs and Your Contracts: Why does the "importer of record" provision matter? (Foley & Lardner)
  • Strattec Security dodges major tariff impact - but now another challenge is on horizon (Milwaukee Business Journal)
  • Logistics Management podcast: Gregory Husisian (Foley & Lardner)
  • US tariffs on steel and aluminum imports now apply to an estimated $328 billion worth of goods (Automotive News)
  • Hyundai raises planned investments in the U.S. to $26 billion (Automotive News)
  • Ford to invest $2 billion to retool Kentucky plant for EVs (Automotive News)
  • GM to import batteries from China for next-gen Bolt EV (Automotive News)