During a White House event on Thursday, U.S. President Donald Trump indicated that auto tariffs may soon be increased, suggesting the move could encourage automakers to ramp up production within the United States.
“I might go up with that tariff in the not too distant future,” Trump said. “The higher you go, the more likely it is they build a plant here.”
This statement comes amid ongoing appeals from automakers for the rollback of the 25% tariffs previously imposed by the Trump administration.
Major American auto manufacturers, including the Detroit Three, have voiced concerns over recent trade deals — particularly a proposed agreement that would reduce tariffs on British car imports while maintaining existing duties on vehicles made in Canada and Mexico.
U.S. President Donald Trump pointed to recent announcements as proof that tariffs are working.
He mentioned General Motors’ declaration this week that it will invest $4 billion across three U.S. plants and shift some SUV production from Mexico back to the United States.
He also referred to Hyundai’s $21 billion investment, unveiled in March, which includes the construction of a new steel plant in the U.S.
“They wouldn’t have invested 10 cents if we didn’t have tariffs, including for manufacturing American steel, which is doing great,” Trump stated.
Last month, Mexico revealed that vehicles produced within its borders and exported to the U.S. will incur an average tariff of 15%, not the standard 25%.
This is because Washington is offering tariff relief based on the percentage of U.S.-made content in the vehicles.
Automakers continue to struggle with the financial impact of tariffs. Both Ford Motor and Subaru of America have recently increased the prices of certain models due to rising costs linked to U.S. trade policies.
In May, Ford estimated that tariffs would result in a loss of approximately $1.5 billion in adjusted earnings.
Meanwhile, General Motors reported that its tariff exposure stands between $4 billion and $5 billion, which includes around $2 billion related to low-cost vehicles imported from South Korea, where GM produces several entry-level Chevrolet and Buick models.
Donald Trump's renewed focus on increasing auto tariffs signals a push to revive U.S. manufacturing and reduce foreign dependency in the automotive sector. By targeting overseas production, Trump aims to incentivize companies to bring jobs and investment back to America — a tactic he claims has already worked, citing recent multi-billion-dollar commitments from GM and Hyundai.
However, the uneven application of tariffs and mounting cost pressures on automakers have sparked backlash within the industry. Companies like Ford and GM are already feeling the squeeze, forecasting billions in losses due to tariff-induced cost hikes. While Mexico benefits from partial tariff relief based on U.S. content, the larger economic impact of a broader tariff hike remains uncertain.
As Trump eyes a possible return to office, the auto industry is preparing for potential policy shifts that could reshape its global strategy and manufacturing footprint. The coming months could prove crucial in defining the future of U.S. automotive trade dynamics.