Foley Automotive Update and the Latest Insights on Tariffs

Special Update — Trump Administration and Tariff Policies

• President Trump on April 14 told reporters he was “looking at something to help some of the car companies” regarding tariffs, and noted “they’re switching to parts that were made in Canada, Mexico and other places, and they need a little bit of time, because they’re going to make them here.” Further details have not been provided and it is unclear if the statements referred to aspects of the executive order imposing a 25% U.S. import tariff on fully assembled automobiles (effective April 3) or the 25% levies on certain major auto parts (scheduled to take effect no later than May 3). 
• The Canadian government on April 15 announced it will allow automakers to import certain U.S.-manufactured cars and trucks without tariffs, provided the vehicles are compliant with the Canada-U.S.-Mexico Agreement (CUSMA), and companies operating in the nation do not shift their vehicle production out of Canada. Canada had previously imposed a 25% retaliatory tariff on vehicles imported from the U.S. that are not compliant with the CUSMA.
• China raised tariffs on all U.S. goods from 84% to 125% effective April 12, and stated that since “American goods are no longer marketable in China under the current tariff rates, if the U.S. further raises tariffs on Chinese exports, China will disregard such measures.” This follows the Trump administration’s implementation of a 125% “reciprocal” duty on many Chinese imports imposed on top of an existing 20% levy on goods imported from China.
• China’s decision to impose export restrictions for certain rare earth minerals and magnets has caused shipments to halt at many Chinese ports pending the establishment of a new regulatory system for the materials. This development could impact automotive supply chains and a range of other sectors.
• President Trump on April 15 issued an executive order launching a Section 232 national security investigation into the United States’ reliance on imports of processed critical minerals and derivative products. The U.S. is significantly reliant on China for the processing of many types of rare earth metals.
• The Trump administration began investigations into imports of certain semiconductors, and the assessment could result in new tariffs.
• The European Commission on April 10 announced a 90-day postponement of its plan to implement counter-tariffs on $23 billion worth of U.S. goods, noting the EU preferred negotiations to escalating trade wars. 
• Six Senate Democrats, along with Sen. Rand Paul (R-KY), on April 8 announced a privileged resolution to force a floor vote over whether to revoke the emergency declaration used as a basis for President Trump’s tariffs. A vote could occur sometime after the Senate returns from a two-week break, according to an update in POLITICO.
• U.S. Senators Chuck Grassley (R-IA) and Maria Cantwell (D-WA) on April 4 introduced legislation that would require the President to notify Congress of coming tariffs within 48 hours of such an imposition and congressional approval within 60 days.
• U.S. House Rep. Don Bacon (R-NE) on April 7 introduced legislation that would restrict President Trump’s authority to unilaterally impose tariffs. The bipartisan bill has two Republican co-sponsors.

Automotive Key Developments

• Automotive News provided overviews of which auto parts and vehicles could be the most susceptible to U.S. import tariffs or Canadian counter-tariffs.
• The Wall Street Journal provided updated analysis on the estimated impact of new tariffs on the revenues of the top automakers.
• S&P Global Mobility on April 14 downgraded its U.S. new light-vehicle sales forecasts by 700,000 units in 2025, 1.2 million units in 2026, and 930,000 units in 2027 due to their expectation that “persistent, high tariffs” are the “next phase of normal.” Prior to the downgrade, S&P projections published on March 27 indicated U.S. light-vehicle sales could fall to a range of 14.5 and 15 million units annually if tariffs are maintained.
• Goldman Sachs lowered its projection for 2025 U.S. new vehicle sales to 15.4 million units, from a previous forecast of 16.25 million units. New vehicle sales in 2026 were revised by 1.1 million units to 15.25 million units.
• Anderson Economic Group estimated a U.S. consumer impact of $30 billion would result from the Trump administration’s 25% automotive import tariffs if the duties are maintained for a full year.
• New vehicle sales in Canada could decline by 25% in 2025, according to revised projections from the Canadian Automobile Dealers Association (CADA).
• The Wall Street Journal referred to Michigan’s economy as “the first victim of Trump’s trade war,” as the state ranks fifth in the nation measured by the size of its imports and exports.
• First-quarter 2025 U.S. new light-vehicle sales increased 4.4% year-over-year, and EV sales rose by an estimated 11.4% YOY, as consumers accelerated purchases ahead of the expectation for higher prices due to tariffs.
• First-quarter 2025 U.S. vehicle sales were up 17% YOY for GM, 10% for Hyundai, 7% for Volkswagen, 5.7% for Nissan, 5% for Honda, and 1% for Toyota. Sales declined 12% for Stellantis and 1% for Ford.
• U.S. House lawmakers introduced several Congressional Review Act resolutions that intend to repeal certain clean-vehicle waivers issued for California under the Biden administration. Senate Republicans are pursuing similar measures.
• Governor Gavin Newsom and California Attorney General Rob Bonta announced they have filed a lawsuit to challenge President Trump’s authority to impose tariffs. The New Civil Liberties Alliance filed a separate suit that alleged the President illegally imposed certain tariffs on Chinese goods.

OEMs/Suppliers 

• Stellantis will temporarily lay off approximately 900 U.S. workers in Michigan and Indiana and idle certain plants in Canada and Mexico to evaluate the effects of the Trump administration’s automotive import tariffs.
• Over 6,000 workers in Canada’s auto sector have received temporary layoff notices since President Trump’s tariffs on automobile imports took effect on April 3.
• GM on April 3 announced plans to hire hundreds of temporary employees to support increased production of light-duty trucks at its Fort Wayne, Indiana, assembly plant.
• Stellantis and Ford are offering employee discount pricing to U.S. consumers, and Hyundai has pledged to freeze its prices until June, amid expectations tariffs will raise prices for new vehicles.
• Two European-headquartered suppliers will require upfront payment from their customers to cover the cost of import duties.
• European automakers are exploring a range of responses to U.S. import tariffs such as pausing shipments of certain vehicles, shifting production, and raising prices.
• BMW, Mercedes-Benz, and Volvo are among the automakers that have indicated they may consider increased production in the U.S. to mitigate the effects of import tariffs.
• Nissan halted orders for sales of certain Mexican-built Infiniti SUVs in the U.S. market due to the Trump administration’s automotive import tariffs.
• Continental is exploring a separation of its ContiTech industrial unit to focus on its more profitable tire business. 
• Infineon Technologies AG will acquire Marvell Technology’s automotive Ethernet business for $2.5 billion, in a deal that is expected to expand the German company’s automobile technology capabilities.
• Toronto-based ABC Technologies Inc. completed its acquisition of U.K.-based TI Fluid Systems. Rebranded as TI Automotive, the combined entities will have a revenue of $5.4 billion and will be headquartered in Auburn Hills, Michigan.

Market Trends and Regulatory

• President Trump directed the Committee on Foreign Investment in the United States (CFIUS) to conduct a review of Nippon Steel’s proposed acquisition of U.S. Steel to determine if “further action” is appropriate. This follows an order prohibiting the acquisition issued by President Biden on January 3, 2025.
• Retail sales of passenger cars in China rose 14.4% in March 2025 from a year earlier, according to analysis from the China Passenger Car Association.
• U.S. Senator Elissa Slotkin (D-MI) introduced the Connected Vehicle National Security Review Act “to establish a national security review process for imports of internet-connected vehicles and components made by companies from China or other countries of concern.” Slotkin introduced a similar proposal as a member of the U.S. House in 2024, and she indicated the Senate bill would expand upon a Commerce Department final rule that prohibits the import and sale of connected vehicles and related components linked to the People’s Republic of China (PRC) and Russia. 
• A bipartisan “right to repair” bill was introduced in the U.S. Senate this month, and this follows similar legislation presented in the U.S. House in February 2025.
• The cost of car repairs has increased by an estimated 27% in the last three years, and consumers could be impacted by higher repair costs if tariffs on auto parts are imposed in the coming weeks.

Autonomous Technologies and Vehicle Software

• Autonomous trucking developer Kodiak Robotics plans to go public in a SPAC deal valuing the company at $2.5 billion.
• Self-driving startup Nuro Inc. raised $107 million in a Series E funding round in a deal that is intended to help scale its autonomous driving technology and establish commercial partnerships.
• Autonomous tech company Aurora Innovation intends to launch in Texas this month its first self-driving tractor-trailer without an operator.
• China may prohibit the terms “smart driving” and “autonomous driving” in certain types of vehicle advertisements amid increased scrutiny in the nation over the safety of advanced driving assistance systems (ADAS), according to a report in Reuters.

Electric Vehicles and Low-Emissions Technology

• To align production with demand, GM will temporarily lay off roughly 200 workers at its Factory Zero EV plant in Detroit, and the automaker will pause production of the BrightDrop electric van at its CAMI plant in Ontario.
• Tesla stopped accepting orders in China for certain EV models imported from the U.S. following the imposition of China’s retaliatory 125% import tariff on American goods.
• Atlas Public Policy estimated that over $7 billion in clean manufacturing projects in the U.S. were canceled in the first quarter of 2025, including over $2 billion for plants dedicated to EV supply chains.
• The U.S. is projected to have at least 200,000 high-speed public chargers in place by 2030, down from previous expectations of 400,000, due to the Trump administration’s suspension of federal funding for the installation of charging stations.
• Kia is developing an electric pickup truck for the North American market, with a goal of selling 90,000 units annually. The automaker hopes to sell 1.26 million EVs globally by 2030, down from a previous target of 1.6 million.
• A Delaware bankruptcy judge approved the sale of Nikola’s Arizona factory and headquarters to Lucid Motors for $30 million.
• The European Union is assessing options to replace recently imposed tariffs on Chinese-made EVs with minimum prices for the imported vehicles, according to an update from the European Commission.