US President Donald Trump has announced a 25 percent tariff on finished vehicle imports, effective April 3. The levy will be applicable to major automotive parts as well. The policy includes a partial tariff exemption for vehicles and components that comply with the USMCA (United States-Mexico-Canada Agreement) rules, limited to the value of US-produced content.
The tariff is expected to have a substantial impact on both auto OEMs and auto ancillary companies. The table below outlines the companies affected by this tariff. To give a perspective, India exported $3.67 billion worth of automotive components to the US during H1FY25
India’s direct exports of fully assembled vehicles to the US are minimal. However,tata motors is expected to be significantly impacted due to JLR’s heavy reliance on the North American market, which accounted for 36 percent of its total sales in Q3 FY25. The tariff could adversely affect the financial performance of Tata Motors.
