- Trump imposes 25% tariffs on foreign cars and auto parts, effective April 3.
- Indian auto parts exports worth $1.5 billion to the US could face a major impact.
- Tata Motors, Eicher Motors, and other Indian companies may see financial setbacks.
US President Donald Trump has announced a 25% tariff on all foreign-made vehicles and auto parts imported into the country. The new tariffs, effective from April 3, could raise car prices in the US and impact the global auto industry.
The move is expected to boost the US automobile industry, but it will also make imported cars more expensive. Tesla CEO Elon Musk reacted to the announcement, saying it would increase the price of Tesla car parts sourced from other countries.
India does not export many vehicles to the US, but it does supply auto parts worth $1.5 billion annually. The new tariffs could reduce demand for Indian auto parts, affecting suppliers and their profit margins. Tata Motors saw a 5% drop in shares as its subsidiary, Jaguar Land Rover (JLR) is impacted. Eicher Motors, which exports Royal Enfield motorcycles to the US, may also face difficulties.
With rising costs, Indian suppliers may need to find new markets or absorb losses. The long-term impact will depend on how companies adapt to these changes.
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