Trump's Tariff Policies Severely Impact Buick: The Century-Old American Automotive Brand Faces the Challenge of Up to 47.5% Import Tariffs

Taiwan • Business • 04/21 00:54
Trump's Tariff Policies Severely Impact Buick: The Century-Old American Automotive Brand Faces the Challenge of Up to 47.5% Import Tariffs

The Trump administration reinitiated high tariffs on imported cars and components from China and South Korea in early 2025, impacting General Motors' Buick brand. Buick's three SUV models, the Envista, Encore GX, and Envision, are subject to tariffs of 27.5% and 47.5%, respectively, due to being manufactured in South Korea and China, resulting in increased costs and higher prices. This could weaken their competitiveness in the U.S. market, despite a 39% increase in sales in the first quarter of 2024. General Motors is considering relocating some production to the U.S. to lessen the impact but is facing capacity constraints.

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Trump's Tariff Policies Severely Impact Buick: The Century-Old American Automotive Brand Faces the Challenge of Up to 47.5% Import Tariffs

The Trump administration reinitiated high tariffs on imported cars and components from China and South Korea in early 2025, impacting General Motors' Buick brand. Buick's three SUV models, the Envista, Encore GX, and Envision, are subject to tariffs of 27.5% and 47.5%, respectively, due to being manufactured in South Korea and China, resulting in increased costs and higher prices. This could weaken their competitiveness in the U.S. market, despite a 39% increase in sales in the first quarter of 2024. General Motors is considering relocating some production to the U.S. to lessen the impact but is facing capacity constraints.

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Tariff Policy and Its Direct Impact on Buick's Imported Models

According to multiple media reports, the Trump administration will restart the "reciprocal tariffs" policy in early 2025, imposing high tariffs on cars and components from China and South Korea. Specifically speaking, the Buick Envista and Encore GX produced in South Korea face a 27.5% tariff, while the Envision SUV produced in China is subject to a 47.5% tariff. These three models are currently Buick's best-selling models in the U.S. market.

According to The Financial Express, these tariffs could increase vehicle prices in the U.S. market by several thousand dollars. Data from Edmunds shows that models like the Envision and Encore GX were favored by consumers for their affordable pricing and updated designs, and the Envista is Buick's first SUV priced under $30,000. However, after the tariffs are implemented, the price advantage of these models will be greatly diminished.

Sales Data and Market Reaction

Before the tariff policy was implemented, Buick's sales performance was remarkable. According to reports from Reuters and DotDotNews, Buick's sales increased by 61% in 2023, with an estimated growth of 10% in 2024, and a 39% annual increase in the first quarter of 2024. This wave of growth mainly comes from Buick's continuously updated SUV product line, successfully attracting young consumers and family users.

However, with the tariffs in place, analysts predict that this growth will be curbed. In April 2025, UBS downgraded General Motors' stock rating from "buy" to "neutral," noting that tariffs will lead to a 9% decline in GM's overall sales in 2025 and a further 4% decline in 2026. Among them, Buick's imported models will be hit the hardest.

Rising Costs and Price Pass-Through

According to Kevin Roberts, Director of Economic and Market Intelligence at CarGurus, auto import tariffs will directly push up new car prices. USA Today reports that to absorb the tariff costs, dealers will have to increase car prices. Roberts estimates that the average new car price will rise from $49,500 to $53,000 in 2025.

In addition, tariffs on auto parts will also increase maintenance and repair costs. Roberts points out that consumers will face higher repair fees and parts prices, which will in turn affect the prices of related services such as car rentals, ride-sharing, and logistics.

Supply Chain Adjustments and Production Capacity Limitations

Facing tariff pressure, General Motors has begun evaluating production strategies. According to AOL Finance, GM CEO Mary Barra stated that the company is considering shifting the production of some models to the U.S. to reduce the impact of tariffs. However, due to limited production capacity in U.S. factories and the highly globalized nature of the supply chain, the implementation space for this strategy is limited.

The Financial Express points out that GM has increased truck production in Indiana and, along with Stellantis, has suspended some production lines in Mexico and Canada to reallocate resource allocation. Nevertheless, Buick's main SUV models still cannot be fully produced within the United States.

Brand Image and Long-Term Risks

Ivan Drury, Director of Trends Insights at Edmunds, points out that Buick is in its most robust development period in decades, and if tariffs lead to price increases and sales declines, it will be a significant blow to the brand. Sam Fiorani, Vice President of AutoForecast Solutions, also states that Buick's current product line has price and quality advantages, and losing these advantages could undermine the brand's foundation for survival in the U.S. market.

Additionally, DotDotNews reports that analysts estimate tariffs will reduce GM's pre-tax profits by $9.5 billion in 2025, leading multiple investment institutions to lower their earnings forecasts by 40%. This is undoubtedly a major challenge for GM, which is trying to revitalize the Buick brand.

References

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