The United States' imposition of a 25% tariff on imported cars has shaken the global automotive industry, leading governments and companies around the world to respond actively.

Taiwan • Business • 04/11 11:10
The United States' imposition of a 25% tariff on imported cars has shaken the global automotive industry, leading governments and companies around the world to respond actively.

On April 3, 2025, President Trump of the United States imposed a 25% tariff on all imported cars and components, causing a global upheaval in the automotive industry. The American automotive industry strongly opposed this decision, citing concerns over supply chain disruptions and increased costs. South Korea initiated an 11 trillion won support plan to stabilize its exports, Swiss companies pursued diplomatic efforts to lessen the impact, and Taiwan was placed on the U.S. list for postponed reciprocal tariff negotiations, beginning talks. This policy is reshaping the global automotive trade landscape.

Key Updates

04/11 16:39

Taiwan Semiconductor Manufacturing Company and Gigabyte Technology expand their operations in the US to counter the US tariff challenges, while Vanguard International Semiconductor Corporation remains focused on the Asian market.

Taiwanese semiconductor and electronics companies are adjusting their global strategies in response to potential high reciprocal duties from the United States. TSMC and Gigabyte have set up plants in the U.S. to strengthen local production; UMC is rumored to be a target for acquisition, attracting attention; Vanguard International Semiconductor has declined to establish a plant in the U.S. and is instead expanding in Singapore. These actions demonstrate the varied strategies of Taiwanese companies in navigating tariff uncertainties.

04/11 16:39

Escalation of the US-China Trade War: Taiwan's Electronics and Semiconductor Industries Benefit from the 145% US Tariff on Chinese Goods, Resulting in a Surge of Urgent Orders

On April 9, 2025, President Trump of the United States announced a 145% tariff on Chinese imports, while postponing high tariffs on other countries for 90 days. This decision caused turmoil in global markets, benefiting Taiwan's electronics and semiconductor sectors as urgent orders from the U.S. surged. The Taiwanese government swiftly responded by starting tariff negotiations with the U.S. and emphasized strengthening regulations to prevent "country of origin" fraud, to ensure the industry's long-term development.

04/11 14:09

Trump's Tariff Policies Spark Global Economic Shockwaves: U.S. Retirement Funds Suffer a $169 Billion Loss, European Central Bank Gears Up, Taiwan-U.S. Tariff Talks Kick Off

On April 2, President Donald Trump announced the implementation of a "reciprocal tariff policy" on 180 countries worldwide, resulting in a $169 billion loss for the top 25 state and local retirement funds in the U.S. within four trading days. The European Central Bank is preparing to tackle financial instability, and the EU forecasts that if the tariffs continue, the U.S. GDP will decrease by 3.3% before 2027. The U.S. has begun tariff negotiations with countries, including Taiwan and Israel. Taiwan is facing a 32% tariff impact and has proposed an industry support plan valued at 8.8 billion New Taiwan dollars.

04/11 13:09

Wells Fargo's first quarter profit surpassed expectations, CEO warns of potential economic impact of tariff risk in 2025.

Wells Fargo, the fourth-largest bank in the United States, announced its first-quarter earnings report on April 11, 2025, with a net profit of $4.89 billion, a 6% increase from the previous year, and earnings per share (EPS) of $1.39, exceeding the market expectation of $1.24. CEO Charlie Scharf warned that the U.S. government's recent tariff increases could hinder economic growth and stated that the bank is prepared for an economic slowdown in 2025. This statement dampened the optimistic sentiment in the banking industry, resulting in Wells Fargo's stock price rising only 1% on the day the earnings report was released.

04/11 12:39

Trump's 90-day tariff postponement did not stabilize the markets: the Asian stocks decline, the gold prices reach a new high, the yen soars to a two-year high

On April 9, President Donald Trump announced a 90-day suspension of higher tariffs on 75 countries, excluding China, in an effort to ease trade tensions, but this move failed to boost market confidence. Asian stock markets briefly rebounded but then fell back, with the Nikkei 225 index plunging 5.4%. The safe-haven sentiment drove gold prices to a record high, and the yen reached a two-year high against the dollar. Concerns about the escalating U.S.-China trade war persist, leading to funds flowing into safe-haven assets.

04/11 11:10

The United States' imposition of a 25% tariff on imported cars has shaken the global automotive industry, leading governments and companies around the world to respond actively.

On April 3, 2025, President Trump of the United States imposed a 25% tariff on all imported cars and components, causing a global upheaval in the automotive industry. The American automotive industry strongly opposed this decision, citing concerns over supply chain disruptions and increased costs. South Korea initiated an 11 trillion won support plan to stabilize its exports, Swiss companies pursued diplomatic efforts to lessen the impact, and Taiwan was placed on the U.S. list for postponed reciprocal tariff negotiations, beginning talks. This policy is reshaping the global automotive trade landscape.

04/09 18:08

The United States' 46% tariff on Vietnam has taken effect, putting pressure on Taiwanese businesses and the garment industry, prompting the Vietnamese government to launch diplomatic efforts.

On April 9, 2025, the United States implemented a 46% tariff on Vietnamese goods, affecting Vietnam's export economy, particularly impacting industries like garments, furniture, and toys. Taiwanese businesses with factories in Vietnam, such as Eclat and Makalot, are under pressure due to reduced orders. Vietnam's Deputy Prime Minister, Ho Duc Phuc, traveled to the U.S. to negotiate, expressing a willingness to reduce tariffs on U.S. goods to zero. A Reuters/Ipsos poll shows that 57% of Americans oppose this policy, fearing it will increase consumer goods prices.

04/09 17:07

Trump urges investment as a "buying opportunity," prompting a 246-point rebound in the Dow, as the China-Europe tariff escalation leads to a 23% drop in Apple's stock price.

On April 9, President Trump of the United States urged investors to "stay calm" via social media, saying "now is a great time to buy," which helped boost the Dow Jones Industrial Average by 246 points at closing. As China and the EU imposed retaliatory tariffs on U.S. goods, global markets experienced turbulence, and Apple's stock price dropped 23% over four days, erasing more than $770 billion in market value. Trump reiterated his wish for Apple to relocate its iPhone production line back to the U.S., but analysts cautioned that this could raise costs to $3,500 per unit, putting pressure on both consumers and inflation.

04/09 16:40

US-China Trade War Escalates: US Imposes a 104% Tariff on Chinese Goods, Taiwan's Electronics Industry Confronts Supply Chain Challenges

On April 9, 2025, the United States imposed a 104% tariff on goods from China, leading to a disruption in the global laptop supply chain. Brands like ASUS, Acer, Lenovo, HP, and Dell paused shipments to the U.S. for two weeks. Taiwan, being a key supply base, is facing tariff pressures from both the U.S. and China, prompting electronics companies to adjust their supply chain and market strategies accordingly. Taiwanese companies are considering shifting production capacity to India or Mexico to avoid the impact of high tariffs.

04/09 15:11

Trump's new tariff policies have triggered global market turmoil: U.S. stocks plunge a 12%, bond market experiences volatility, retaliatory tariffs are escalating.

On April 9, 2025, President Trump of the United States imposed a 104% tariff on Chinese goods and extended it to multiple countries, which sparked global trade tensions. China and the European Union quickly retaliated, leading to a sharp decline in the U.S. stock market, with the S&P 500 index dropping 12.1%. The U.S. bond market experienced turmoil, and Deutsche Bank warned that the Federal Reserve might need to initiate emergency quantitative easing. The Nobel Prize-winning economist Paul Krugman warned that this policy could trigger a financial crisis. Trump called on investors to stay calm, saying it's a good time to buy.

U.S. Auto Industry: Supply Chain Impacted, Calls for Tariff Removal

The U.S. automotive industry has reacted strongly to the new tariff policy. According to a report by the Center for Automotive Research, a 25% tariff on imported cars will impose an additional cost of up to $108 billion on U.S. automakers by 2025. The Big Three automakers in Detroit (Ford, General Motors, Stellantis) will see an average increase of about $4,911 in tariff costs per vehicle for imported parts, and an average increase of $8,722 for complete vehicle imports.

MichAuto and the Detroit Regional Chamber have jointly called on the Trump Administration to remove the tariffs, pointing out that the automotive industry is highly dependent on the global supply chain, and tariffs pose a serious threat to local employment and industry competitiveness. Although some manufacturers like General Motors have adjusted production lines and increased truck production in Indiana, and Stellantis has temporarily closed plants in Mexico and Canada, the overall industry still faces high uncertainty.

South Korean Government: Launches 11 Trillion Won Support Plan to Stabilize Auto Exports

As one of the main sources of U.S. auto imports, South Korea's auto exports to the U.S. are projected to reach $34.7 billion in 2024, with auto parts exports amounting to $8.2 billion. In response to the 25% U.S. tariff impact, the South Korean government announced on April 9 the "Strengthening Automotive Ecosystem Emergency Response Plan," totaling 11 trillion won (approximately $7.4 billion), covering liquidity support, domestic demand stimulation, export market diversification, and technology R&D.

Specific measures include providing 2 trillion won in policy financial support, a 1 trillion won co-prosperity plan to assist SMEs, 250 billion won in emergency operating funds, and tax payment deferrals. Additionally, the government is expanding electric vehicle subsidies, reducing new car consumption taxes, and promoting FTA negotiations with countries like the UAE and Mexico to diversify export market risks.

The Ministry of Trade, Industry and Energy also stated that it will announce the "Basic Plan for Future Car Components" and the "Autonomous Driving Blueprint" in the third quarter, and strengthen negotiations with the U.S. to seek tariff treatment equivalent to other allies.

Swiss Companies: Significant Tariff Impact, Seeking Diplomatic Assistance

Economiesuisse, the Swiss Federation of Commerce and Industry, released a survey on April 9 indicating that 19% of Swiss companies reported being "very severely" impacted by the new U.S. tariffs, 30% reported "severe" impact, and 27% reported "some impact." The U.S. market is becoming increasingly important for Swiss companies, especially against the backdrop of slowing demand in the EU and China markets.

The survey shows that 50% of companies expect a decline in demand from U.S. consumers and business clients, 31% are concerned about a global economic recession, and 8% worry about supply chain disruptions or decreased competitiveness. Although 80% of companies have not yet initiated specific response measures, many are exploring ways to mitigate tariff impacts through third-country transshipment, contract adjustments, or market diversification.

Swiss companies generally hope the federal government will seek tariff exemptions or reductions through diplomatic means and call for government support measures to maintain the competitiveness of Swiss foreign trade.

Taiwan: Included in Initial U.S. Negotiation List, Seeking Tariff Reductions

Taiwan was initially subjected to a 32% tariff under the U.S. reciprocal tariff policy, but after the Trump Administration announced a 90-day suspension of reciprocal tariffs on April 9, Taiwan was included in the initial negotiation list. President William Lai stated that the government will seize the negotiation opportunity to ensure national interests and industrial development and has already initiated economic and trade consultations with the U.S.

Foreign Minister Joseph Wu pointed out that both sides will engage in in-depth discussions on issues such as procurement, investment, and the removal of tariff barriers. The Ministry of Economic Affairs also stated that Taiwan will expand the procurement of U.S. goods as one of the bargaining chips in negotiations. The government has also allocated a budget of 88 billion New Taiwan dollars to support industries, assisting affected SMEs and traditional industries.

Additionally, the American Institute in Taiwan has also called for meaningful consultations between the two sides to avoid long-term damage to the supply chain and industry.

References

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What long-term impact will the United States' 25% import tariff on cars have on the global automotive supply chain?