US President Donald Trump’s erratic trade policy has thrown the global economy into chaos, and the automotive sector along with it. Cars consist of thousands of parts sourced from around the world, frequently crossing borders in the course of their assembly journey. “The complexity of global automotive value chains is drastically underappreciated in many of the discussions around the impact of these tariffs,” says Jacob Gunter, Lead Analyst, Economy, at the Mercator Institute for China Studies (MERICS). “The potential impact of tariffs imposed across every boarder is massive.”

Trump’s on-again off-again tariffs started off with a focus on USMCA trading partners Canada and Mexico, taking the form of executive orders issued on the basis of a national emergency caused by the inflow of fentanyl and migrants. He then widened the scope to include 57 countries, but with a particularly hard stance on China. The stated aim was to spur nations to the bargaining table, and according to the President, they are keen to cut a deal. Speaking at the National Republican Congressional Dinner on 8 April 2025, Trump told attendees: “These countries are calling us up, kissing my ass. They are dying to make a deal.” Some may be, but not China.

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