The auto industry discovers Trump is serious about tariffs after all

It wasn’t long ago when many automakers and suppliers were dismissive of the threat tariffs posed to their businesses.

Everyone knew the stakes, of course. Tariffs at levels President Donald Trump promised on the campaign trail would be devastating to the highly integrated North American supply chain, executives and analysts said in the months before and after the election.

But the consensus among them was that tariffs would only be a negotiating tool Trump would use to reach deals with other nations on trade and immigration. Long-lasting, broad-based tariffs would be too damaging to businesses and the stock market for Trump to go through with them, they thought.

That’s no longer the case.

A growing number of companies see tariffs as the biggest crisis the industry has faced in recent years. That’s no small feat considering the past five years included a pandemic and a massive microchip shortage, each of which paralyzed global auto production.

That sentiment is reflected in the latest S&P Global Mobility tariff forecast. S&P Global sees a 50 percent chance Canada and Mexico duties last for several months and a 20 percent chance they last longer than that. Just a few weeks ago, it said a quick resolution was the most likely scenario.

Companies are taking Trump’s April 2 deadline, when a range of new tariffs are set to go into place, seriously.

Automakers including Ford and Stellantis want to import as many parts from Canada and Mexico as they can before April 2, and suppliers are rushing to comply with those requests. Nissan is ramping up production in Mexico ahead of that date, while the Japanese auto industry as a whole is bracing for “significant” production cuts.

There are still a lot of questions about what trade policy will look like after April 2. Among them:

How will reciprocal tariffs be structured? Will tariffs on global automotive imports start then, as Trump has said? Will all exemptions on Canada and Mexico tariffs be lifted that day, or might some stay in place? Will Mexican President Claudia Sheinbaum’s careful approach with Trump pay off? And how will the upcoming federal election in Canada impact how it responds?

We don’t have those answers yet.

But automakers and suppliers have received a clear answer about whether Trump is serious about tariffs. He is, and they’re not taking it lightly anymore.

-- John Irwin, supplier reporter

“The ability to understand a three-dimensional world will enable a new era of physical AI and robotics. Each one of these waves opens new market opportunities for all of us.”

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 From: "Nvidia sees trillion-dollar opportunity in further embedding its AI tech in auto industry"

Automotive News editors' picks:

Brace yourselves for a whole new braking system: The way brakes operate hasn’t changed much in 100 years: The driver presses the brake pedal, a master cylinder pushes fluid through a series of pipes to disc brake calipers and wheel cylinders inside of drum brakes and the pressurized fluid moves pistons that squeeze the pads against rotors to slow the vehicle. Now more precise computer-controlled electronic components are about to replace tried-and-true low-tech hydraulics. Brake-by-wire can use artificial intelligence and algorithms to improve safety by shortening stopping distances and keeping vehicles more stable under emergency braking. Brembo’s Sensify system is expected to arrive next year, the company said. Brembo won’t name its customer or reveal in which market segment the system will debut. But ZF, the German supplier best known for automatic transmissions, provided a hint at CES in Las Vegas in January. Peter Holdmann, ZF’s chassis division head, told reporters ZF’s contract calls for it to equip 5 million vehicles with Electro-Mechanical Braking. And 700,000 of those vehicles will be heavy-duty pickups. As Automotive News reports, that pretty much limits the vehicle to a small universe of models: Ford’s Super Duty trucks and larger versions of Chevrolet and Ram pickups.

Cyberattack averted for hundreds of dealerships: This latest incident was yet another reminder of the vulnerabilities dealers and their software vendors face. The situation was detected by Reynolds and Reynolds’ Proton cybersecurity division this month, when malware appeared in third-party video links provided by I Do Stream, a Connecticut company that does business as LESA Video Solutions. Customers typically click the images to find more information about inventory. Instead, the malware presented them with a bogus identity check to prove they were human, something legitimately used on websites to deter spam and bot attacks. It was a social engineering attack designed to access computers of dealership employees and customers who clicked on the images and followed instructions once the malware kicked in. Proton said it helped prevent the malware from spreading through its clients — about 1,000 dealerships housing 40,000 computers. Erik Nachbahr, president of cybersecurity firm Helion Technologies, said the LESA incident is “a textbook example” of cyberthreats dealerships and their software vendors face. “Early detection and a fast, decisive response to suspected cyberattacks are critical to heading off catastrophic consequences, like what we saw with the CDK attacks last year,” Nachbahr told Automotive News.

Genesis names Amy Marentic as new CMO after Drew Slaven’s quick exit: Genesis Motor America has hired consumer analytics and consulting firm Circana executive Amy Marentic as its new CMO as Hyundai’s luxury brand looks to continue sales momentum and market share gains in the luxury segment. Marentic replaces Drew Slaven, who left the company in January after joining as CMO in March 2024.

Automakers, tech industry urge Trump administration to speed self-driving car deployment: Major automakers and tech groups recently called on the Trump administration to take steps to speed deployment of self-driving cars, citing a number of regulatory hurdles. The Alliance for Automotive Innovation, a group representing nearly all major automakers, called on Transportation Secretary Sean Duffy in a letter seen by Reuters to quickly implement a national performance-based framework and assert the National Highway Traffic Safety Administration’s role as sole regulator of self-driving vehicle hardware, software and operation.

Stellantis working with suppliers, dealers ahead of April 2 tariff deadline: Stellantis is moving some auto parts from Mexico and Canada into the U.S. sooner than usual and working with dealerships to expedite orders of vehicles that could be subject to tariffs next month. CFO Doug Ostermann said the automaker has been “working upstream” with Tier 1 suppliers in advance of the April 2 tariff deadline set by President Donald Trump.

Events

• March 27: J.D. Power Mexico Sales Satisfaction Index Study released

• April 1: March U.S. sales reported'

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March 27, 1952: Kiichiro Toyoda died at age 57 in Japan. He founded Toyota Motor Corp. in 1937 as a spinoff of the family's successful automatic loom-making empire.