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GM chart courtesy of StockCharts.Com

Global Disruption

Reuters reports US Auto Tariffs Shake Global Industry as Higher prices, Job Losses Loom.

U.S. President Donald Trump’s announcement of a 25% tariff on auto imports rippled throughout the world on Thursday, as global carmakers warned of immediate price hikes and dealers raised fears of job losses in big auto-exporting countries, many of which are U.S. allies.

The new levies are a precursor to another expected round of wide-ranging U.S. tariffs to be levied next week. But the auto tariffs alone could add thousands of dollars to the average cost of a vehicle in the U.S. and further dampen demand at a time when the sector is already struggling to manage the transition to electric cars. Most auto stocks tumbled on Thursday, with U.S. electric-vehicle maker Tesla (TSLA), a noted exception.

“The entire automotive industry, global supply chains and companies as well as customers will have to bear the negative consequences,” said Germany’s Volkswagen (VOWG.DE) in a statement.

The United States is the world’s largest importer of cars, most from Japan, South Korea and Germany, along with vehicles from neighbors Canada and Mexico. Nearly half of all cars sold in the U.S. last year were imported, according to research firm GlobalData.

Shares of General Motors (GM) down nearly 7% on Thursday afternoon, while Ford Motor (F), opens new tab and U.S.-listed shares of Stellantis were down about 3%. Tesla’s stock rose about 5%, as Elon Musk’s company is less exposed to tariffs than its competitors.

Higher Prices?

In isolation, tariffs of the magnitude imposed are guaranteed to increase prices.

The same is true even if Trump’s tariffs bring production back to the US.

However, it’s certainly possible for tariffs to collapse the global economy offsetting the inflationary aspects.

The reasons we did not seen price increases in Trump’s first term are 1) strengthening US dollar 2) tariff avoidance (China imports masked as imports from Vietnam or Mexico), and 3) the relative small size of tariffs imposed.

Note that Trump now wants a weaker dollar.

TSLA daily Chart

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TSLA chart courtesy of StockCharts.Com

The Reuters-reported 5 percent bounce is now 2.71 percent.

I expect the dead cat bounce in Tesla is about over.

Tesla production in the US is relatively less impacted, but foreign growth especially Germany and China is dead.

Tesla is the obvious global retaliation against Trump’s auto tariffs.

And EV completion everywhere is increasing.

Tesla Sales in Germany Slump 76 Percent in February

On March 5, Reuters reported Tesla Sales in Germany Slump 76 Percent.

According to Germany’s road traffic agency, Tesla sold 1,429 cars in Germany, a decline of 76%, an even bigger decline than the 60% drop in January. Overall, sales of electric vehicles rose 30.8% to 35,949 in Germany.

EU Tesla February Sales

•  Germany -76%
• Netherlands -24%
• Sweden -42%
• Norway and Denmark -48%
• France -45%
• Italy -55%
• Portugal -53%

BYD Annual Sales Hit $100 Billion Eclipsing Rival Tesla

On March 25, CNN reported BYD Annual Sales Hit $100 Billion Eclipsing Rival Tesla

China’s EV giant BYD recorded revenues of 777 billion yuan ($107 billion) for 2024, surging ahead Elon Musk’s Tesla in annual sales amid intensifying competition in the global market for clean-energy cars.

In a filing on Monday, BYD reported a 29% jump in sales from the previous year on deliveries of 4.27 million cars, including fully electric vehicles and hybrids.

By comparison, Tesla’s 2024 revenue was $97.7 billion, and it delivered 1.79 million battery-powered vehicles. Its annual deliveries declined for the first time last year by 1.1%.

In its latest annual report, BYD CEO Wang Chuanfu said the company experienced “rapid development” last year.

“BYD has become an industry leader in every sector from batteries, electronics to new energy vehicles, breaking the dominance of foreign brands and reshaping the new landscape of the global market,” he said.

BYD has been increasingly challenging the once dominant EV player Tesla.

In 2024, BYD had a 32% share of China’s total market for new energy vehicle sales, which includes hybrids. Tesla claimed only 6.1% of the market, despite reaching a record high in terms of shipments, according to the China Passenger Car Association.

Tesla’s Global Growth Rate Surge Is Over

Add it all up and Tesla’s global growth rate surge is over for political reasons (Vance’s and Musk’s interference in German elections), Tariff retaliation reasons, and third, China has already gotten what it needs from its relationship with Tesla in China.

But hey, Tesla is a “relative” winner in the US, at least for now.

Sadly, this is how Trump views global trade. If the US loses an arm, and the EU loses a foot, and Canada loses both legs, that is a “win” to Trump.

Lie of the Day

Yesterday, I commented News Flash: Trump Says “Car Companies Will Be Thrilled With Tariffs”

Who Do You Believe?

The Ford CEO, GM CEO, and Cox Automotive chief economist Jonathan Smoke say they are not thrilled by the tariffs.

But Trump says they are thrilled.

Since Trump has never been known to lie, you have to go with Trump on this one.

See the rest of the post for more sarcasm.

Regarding Reciprocal Tariffs

Reader: “Tariffs are reciprocal. All Canada has to do is to lower the tariffs they charge the US to what they want the US to charge them.”

USMCA IS reciprocal right now.
In extremely minor instances where it isn’t, TRUMP negotiated the deal.

Please read over and over Cheese Was a “Key Achievement” of Trump’s USMCA Trade Agreement

The fact of the matter is Trump has no legitimate right to unilaterally break a deal ratified by the Senate 89-10.

The additional pertinent fact is Trump just proclaimed to the world that he may not honor any deal, even those he signs. At some point there is a cost to this lack of trust.

Related Posts

March 24, 2025: Trump Announces 25 Percent Tariffs on Countries that Buy Venezuela Oil

I eagerly await Trump’s major announcement for Venezuela to be the 53rd state.

Trump Postpones “Liberation Day” to Focus on the “Dirty 15”

On March 24, 2025 I noted Trump Postpones “Liberation Day” to Focus on the “Dirty 15”

Trump proclaimed April 2 as “Liberation Day” on which he would announce specific tariffs on each of 200 countries.

I had my flags out and firecrackers ready.

And as my lead chart clearly shows, we desperately need liberation from Canada.

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