From price hikes to boosting US production, heres how automakers are responding to Trump's tariffs
Benjamin Zhang,Shubhangi Goel,Tom Carter
6 min read
Stellantis paused production at two factories in response to Trump's tariffs on imported cars while Mercedes-Benz plans to boost US SUV production.REUTERS/Carlos Barria
Automakers are responding to the Trump administration's latest round of auto tariffs.
Ford offered customers an employee discount, but is also raising prices on Mexico-made models.
Stellantis paused production at two factories while Mercedes-Benz plans to boost US SUV production.
The Trump administration's latest wave of tariffs, which went into effect at the beginning of April, shocked the automotive industry.
Automakers have responded to the trade confusion in various ways, from offering discounts to shoppers who hope to avoid future price increases to adding import fees on vehicles built outside the US.
The "draconian" trade policies, as one Wall Street analyst called the originally proposed tariffs, may also affect autoworkers, with Stellantis pausing production at two assembly plants in Mexico and Canada.
Wall Street believes the tariffs on imported cars could cost the auto industry more than $80 billion and slash Detroit's Big Three's earnings by up to 60%, thanks to an additional $5,000 of input costs per vehicle.
Here's how the industry at large is responding:
Nissan is pausing US orders of some Mexico-built SUVs
Nissan said in April it would pause new US orders of two Infiniti SUVs, which are built in Mexico. The announcement came after President Donald Trump's auto tariffs went into effect.
Nissan will pause new Mexico-built orders for the Infiniti QX50 and QX55 SUVs for US sales, the Japanese carmaker said in a statement to Business Insider. The model will still be produced for other markets, and production of other US models in Mexico and Japan will continue.
Nissan also said it would keep two shifts of production of the Rogue SUV at its Smyrna, Tennessee plant, reversing a January plan to end one of the shifts later this month. This will keep "more localized volume in the US that is free of the new auto tariffs," Nissan said in the statement.
Ford offers employee discounts to all customers
Shortly after the tariffs took effect, Ford announced that it would make employee pricing available to consumers for the next two months.
"In times like these, talk is cheap. At Ford, we believe in action," Rob Kaffl, Ford's director of US sales and dealer operations, said in a press release.
Ford said it would offer an employee discount to all buyers of specific models in response to Trump's newly announced tariffs.Ford
The discount, which ends June 2, applies to all Ford and Lincoln models except Raptors, the 2025 Expedition and Navigator SUVs, and Super Duty trucks.
How much a consumer saves depends on the vehicle, but it could easily run into the thousands. The discount would be applied on top of any other deals or promotions a dealership is offering, the company said.
Ford declined to confirm whether the tariffs would lead to higher sticker prices.
A company spokesperson told Business Insider that it has a 74-day supply of vehicles in stock that haven't been affected by tariffs, compared to 50 days for GM and 24 days for Toyota. (Around 60 days of supply is considered healthy in a normal economic environment.)
Analysts say Ford is one of best best-positioned US automakers to weather the tariffs.
Ford later announced plans to raise prices on Mexico-made trucks and SUVs
Ford announced in early May that it would raise prices on select vehicles made in Mexico by as much as $2,000, Reuters reported. The affected vehicles include the Ford Maverick pickup, the Bronco Sport compact SUV, and the Mustang Mach-E EV SUV.
Only units produced after May 2, which should begin to arrive at dealers in late June, will have the higher MSRP.
A Ford spokesperson did not respond to a request for comment
Stellantis paused work at two factories and laid off hundreds at others
Stellantis, which owns former Chrysler brands like Dodge, Jeep, and Ram, temporarily paused production at its Windsor assembly plant in Canada and Toluca assembly plant in Mexico in April, a spokesperson told Business Insider.
The Windsor plant, which makes Pacifica/Voyager minivans and Charger Daytona EV muscle cars, was offline for two weeks and resumed operations the week of April 21, Automotive News reported.
The Toluca plant, which builds Jeep Compass and Wagoneer S SUVs, stopped production for the second half of April.
The production stoppage at these two facilities resulted in the temporary layoffs of 900 workers from the company's powertrain and stamping plants in Michigan and Indiana, the spokesperon said.
VW tacks on a special fee for tariff-affected cars
The Tennessee-made VW Atlas.Volkswagen
German automaker Volkswagen has confirmed it will add an "import fee" to the sticker prices of vehicles affected by the tariffs, a spokesperson said. The import fee will be added to the destination charge, which is tacked onto the price of a new car.
It's unclear how much the tariffs will affect the cost of new VW cars, as no final pricing decisions have been made, the spokesperson said.
Its top-selling Atlas and Atlas Cross Sport midsize SUVs are made in Chattanooga, Tennessee. Its other top sellers — the Jetta sedan, the Taos SUV, and the Tiguan SUV — are all made in Puebla, Mexico.
Mercedes and Volvo plot production shifts
Mercedes-Benz said it would move production of the popular GLC SUV to its factory near Tuscaloosa, Alabama. The GLC will be produced alongside the larger GLE and three-row GLS SUVs at the plant.
"It's our best-selling model in the United States, so I think it's a fairly logical choice for us to expand our product lineup out of Tuscaloosa," said Jason Hoff, the new Mercedes-Benz North America CEO, on a media call on May 12.
Hoff and Mercedes-Benz CEO Ola Källenius expect US production of the GLC to commence by the end of 2027.
The Alabama-made GLCs will be sold in the US and in other parts of North America, like Canada.
The CEO of Swedish brand Volvo Cars told Bloomberg in April that the carmaker would look to build more vehicles at its South Carolina factory in response to the tariffs.
"We will have to increase the number of cars we build in the US, and surely move another model to that factory," said Håkan Samuelsson, who recently returned to Volvo as CEO.
Samuelsson said the company would "look closely" at which model it moves to the factory, which already builds the EX90 and Polestar 3 EVs. Volvo did not immediately respond to a request for comment from BI.
A company spokesperson told Reuters that the Swedish automaker laid off 5% of its workforce at its Charleston factory in May, which equates to 125 of its 2,500 employees. However, the company confirmed to the outlet that it remains committed to expanding production at the South Carolina facility and creating 4,000 jobs.
A spokesperson for rival BMW told BI the luxury carmaker was also still "evaluating" the new levies but called on the US and Europe to reach a deal quickly to avoid further pain for consumers.
