Trump's Tariff War Has Cost The Auto Industry $12 Billion So Far

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Good morning! It's Friday, August 8, 2025, and this is The Morning Shift, your regular roundup of nan apical automotive headlines from astir nan world, successful 1 place. This is wherever you'll find nan astir important stories that are shaping nan measurement Americans thrust and get around.

In this morning's edition, we dive into conscionable really overmuch Trump's tariffs person costs nan car manufacture and return a look at China's slowing car sales. We're besides talking astir Ford's determination to hold immoderate EVs until 2028 and CarGurus' determination to upwind down its CarOffer operation.

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Donald Trump's tariffs person only been astir for a fewer months astatine this point, and they're already causing financial havoc passim nan automotive industry. New study shows that his duties person costs nan assemblage astir $12 cardinal truthful far. Here's nan rub, though: this is acold from over, and automakers aren't going to support eating nan bulk of these costs forever.

The only money-saving responses these companies person are to raise prices aliases bring accumulation to nan U.S. Neither of these are easy decisions to make, and nan second tin return years if nan institution doesn't person a immense footprint present already. From the Wall Street Journal:

White House waste and acquisition argumentation whitethorn beryllium accelerating an manufacture inclination toward making cars person to wherever they are sold. The large car markets of North America, Europe and China are progressively divided by different regulations, technologies and user preferences, encouraging automakers to creation and manufacture locally.

[...]

The full deed from higher import duties reported by nan large listed players now stands astatine $11.8 billion, according to a Wall Street Journal tally.

And nan hits will support coming: Toyota forecast tariffs will create a $9.5 cardinal load done its fiscal twelvemonth that ends adjacent March, starring to an anticipated 44% diminution successful nett profit.

For nan world's 10 largest automakers, not including those successful China, nett profit is presently forecast to autumn by astir a 4th this almanac twelvemonth to its lowest level since 2020, erstwhile nan pandemic led to cash-draining mill shutdowns.

Right now, it seems for illustration astir automakers are successful a spot of a holding pattern — not wanting to make a incorrect move and get yelled astatine by Trump. I get that, but it's only going to extremity up hurting consumers. After all, they're nan slightest important portion of this full puzzle.

I'm really not excessively judge really this each ends, but I'm reasonably assured that immoderate nan consequence is, we are going to beryllium nan ones who are getting screwed. You cannot expect automakers to eat this money everlastingly aliases conscionable prime up and move mill operations to nan U.S. successful nan blink of an eye. Has personification tried telling Trump that?

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China's promise to extremity its automotive industry's fierce value war seems to beryllium a double-edged sword. On 1 hand, less models were discounted successful July; however, connected nan different hand, nan move is intelligibly hurting sales. The Passenger Car Association says that 17 vehicles for waste successful China had value cuts. That's down from 23 vehicles pinch value cuts successful July of 2023 and 2024.

Since car prices aren't being artificially deflated, wide conveyance income fell to 1.8 cardinal units successful July — a 12% driblet from nan erstwhile month. A somewhat dim agleam spot is nan truth that income were up 6.3% year-over-year in July. That sounds for illustration beautiful bully news until you see nan truth that they'd been up astir 15% each period since March. From Bloomberg:

China has intensified scrutiny of its car assemblage connected concerns nan extended value warfare that's plagued nan manufacture is unsustainable and risks sending weaker firms into bankruptcy. Officials summoned nan heads of awesome electrical conveyance makers, including BYD Co., to Beijing successful early June, wherever they were told to self-regulate and instructed to not connection unreasonable discounts.

Beyond nan carmakers, authorities person besides cracked down connected commissions for dealers who get customers to motion up to car loans offered by a partnering slope — a maneuver that exacerbated nan value warfare arsenic dealers often utilized portion of nan kick-back to trim prices. That alteration besides contributed to nan slowdown successful income successful July, nan relation said.

It's not each bad news for nan industry, though. Some analysts judge that income for 2025 will still turn wide contempt nan truth that location are less deals to beryllium had. Some of this could beryllium owed to nan thought that buyers will unreserved to get into a car earlier a 10% exemption connected conveyance purchasing taxation is trim to 5% starting adjacent year. We shall see.

None of this is terribly unexpected. There was nary measurement these companies were going to spell connected everlastingly offering their vehicles astatine unbelievable discounts. That's not really a winning business plan. Still, it was bully for buyers who were capable to return advantage of nan situation. 

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If you were looking guardant to a 2nd electrical Ford motortruck aliases van, you're going to person to support waiting. The institution conscionable delayed 2 of its next-generation electrical vehicles to make room for smaller, much affordable offerings. Basically, Ford is saying we're each broke, truthful it needs to cater to america a spot more. 

The low-cost EV level is designed to underpin a bunch of smaller cars, starting pinch a mini pickup motortruck successful 2027. It is Ford, aft all. To beryllium fair, Ford already has nan F-150 Lightning and E-Transit disposable to satiate consumers, but those are hardly purpose-built EVs. From Automotive News:

The automaker successful caller months told suppliers that a full-size electrical pickup group for its BlueOval City assembly works successful Tennessee has been delayed to 2028 from 2027, according to 3 group acquainted pinch nan plans. Separately, an electrical van — expected to beryllium a next-generation E-Transit — slated for 2026 accumulation successful Avon Lake, Ohio, besides is delayed until 2028, nan sources said.

Both vehicles already person been pushed backmost before. The van, first announced successful 2022, primitively was expected "mid-decade," while nan pickup, known internally arsenic "T3," initially had been promised by this year.

"F-150 Lightning, America's best-selling electrical truck, and E-Transit proceed to meet today's customer needs," a Ford spokesperson said successful a statement. "We stay focused connected delivering our Ford+ scheme and will beryllium nimble successful adjusting our merchandise motorboat timing to meet marketplace needs and customer request while targeting improved profitability."

This isn't nan first clip Ford has changed its EV strategy. Last year, it canceled a brace of three-row electrical crossovers, deciding to usage nan mill abstraction they would person taekn up to build Super Duty trucks. Never chage, Ford.

The T3 is meant to beryllium a replacement for nan F-150 Liughtning, and it'll beryllium a centerpiece of Ford's $5.6 cardinal finance that CEO Jim Farley has called a "seminal moment" for nan company.

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Welp, that didn't past long. After 2 short years, CarGurus announced it is shutting down operations of its wholesale integer marketplace, called CarOffer, aft afloat acquiring nan institution successful 2021. The company's CEO said it assessed strategical alternatives for CarOffer, but location was obscurity to spell pinch it pinch acknowledgment to nan authorities of nan existent market. Damn. RIP. From Automotive News:

"It has struggled successful today's much volatile and unpredictable pricing situation wherever dealers require much elasticity and broader automation to streamline fulfillment," [CEO Jason] Trevisan said during nan company's second-quarter net telephone Aug. 7.

He said that nan institution will still usage technology, analytics and insights CarOffer developed.

"Going forward, while we will nary longer run nan CarOffer transactions business, we will clasp and build connected nan underlying exertion we created for it, capabilities that we judge stay cardinal to CarGuru's sourcing strategy," Trevisan said.

Right now, nan scheme is to upwind down CarOffer done nan remainder of 2025. It's expected to costs location betwixt $14 and $19 million. $5 to $7 cardinal of that will travel from one-time restructuring costs and "contract ermination charges."

This is simply a very unseremonious extremity to CarGurus' venture.  The company paid $140 cardinal successful rate and banal for 51% of nan institution successful 2021. The institution completed its acquisition of nan remaining 49% successful November of 2023, paying $75 cardinal successful cash. Unfortunately, each of that was for nothing. Bummer.

History.com

It's benignant of nosy really you tin look astatine nan problems of today's world and trace a nonstop statement backmost to nan Reagan administration. If you want to study much astir The Gippers dumbass determination to laic disconnected thousands of striking air-traffic controllers, caput complete to History.com.

This opus is 15 years aged astatine this point, but it still goes incredibly hard. If you want to commencement nan past time of nan activity week disconnected nan correct way, look nary further.