President Donald Trump’s decision on Saturday to enforce an additional 10% tariff on Chinese imports has a limited effect on U.S. vehicle imports. However, these tariffs also impact auto parts, potentially driving up vehicle prices for consumers.
The U.S. has annually imported between $15.4 billion and $17.5 billion worth of transportation goods from China, including $9 billion to $10 billion per year in auto parts and accessories for vehicles, tractors, and other special-purpose vehicles, according to the U.S. International Trade Commission.
The most significant impact on vehicles will be on the Lincoln Nautilus by Ford Motor and the Buick Envision by General Motors. These crossover models represented 83,884, or 95%, of the 88,515 China-made vehicles sold in the U.S. last year.
“It’s mainly GM and Ford that are really hit from a volume standpoint,” said Jeff Schuster, GlobalData’s vice president of automotive research. “Our domestic guys are the ones taking the brunt of this, at least for full vehicles … but it can be muted to some extent.”
Other automakers, such as Volvo, which is owned by China’s Geely, and its electric vehicle subsidiary Polestar, import far fewer vehicles into the U.S. They have also adjusted their production strategies to minimize imports from China. This shift is particularly noticeable in the electric vehicle sector, following the Biden administration’s 100% tariff last year on EV models from China.
Ford’s incoming CFO, Sherry House, stated on Wednesday that the company will “assess the situation” regarding tariffs on Chinese goods “as it plays out, including the response from China, and evaluate whether or not it affects” its import and export strategy.
China-made consumer vehicles accounted for just 0.6% of the approximately 16 million new vehicles sold in the U.S. in 2024, according to GlobalData. This figure is similar to the volume of vehicle imports from the United Kingdom, Sweden, and Slovakia.
Tariffs imposed on imports from Canada or Mexico—responsible for 23.4% of U.S. vehicle sales last year, as reported by GlobalData—would have a far greater impact on the American car market.
GM Truck Manufacturing“While vehicle imports from China are minimal, auto parts imports amount to roughly $15-20 billion per year, per the U.S. International Trade Commission, and China is a key part of the battery/storage supply chain (especially LFP batteries used in utility-scale energy storage),” Goldman Sachs analyst Mark Delaney stated in an investment note on Sunday.
The extent to which tariffs could impact batteries or raw materials for EVs remains uncertain, especially as EV adoption is progressing more slowly than anticipated.
However, numerous electrified vehicles in the U.S. incorporate a significant percentage of components sourced from China, according to data from the National Highway Traffic Safety Administration.
These include the Genesis G80 EV (25%); Hyundai Kona EV (50%) and Hyundai Ioniq 5 N (30%); Kia EV9 (35%) and Niro Electric (25%); Nissan Ariya EV (40%); Toyota bZ4x EV (20%) and RAV4 PHEV (20%); and Volkswagen ID Buzz EV (25%).
Mike Jackson, executive director of strategy and research at MEMA Original Equipment Suppliers, expressed concern regarding tariffs. He noted that while the additional 10% tariff on Chinese imports is not as impactful as those on North American goods, it does raise costs.
“It’s a challenge. It represents a higher cost, and that cost is going to have to be borne,” Jackson told CNBC on Wednesday at the Federal Reserve Bank of Chicago’s auto conference in Detroit. “Clearly China continues to contribute very valuable content. They’ve optimized for electronics and a wide range of aspects.”
How automakers will respond—whether by passing cost increases onto consumers, altering supply chains, or implementing other measures—remains uncertain.
Passing these costs onto consumers could potentially affect sales. New vehicle prices are still at historically high levels, averaging around $50,000, according to Cox Automotive.
“There’s not a specific item coming from China that’s under this tariff that says, ‘Oh, no, this is the thing that’s going to mess everything up’ … but they will drive up costs,” said Stephanie Brinley, principal automotive analyst at S&P Global Mobility. “It plays into a broader issue, a broader problem with pricing.”
Brinley suggested that such price increases could influence new U.S. vehicle sales, which S&P Global Mobility had previously projected to reach 16.2 million units before factoring in any tariffs.
