S&P Global warns Trump tariff plan could cost auto industry major profits

An S&P Global report on Friday warned that President-elect Donald Trump's plans to impose tariffs on China, Canada and Mexico, could mpact the global auto industry by biting into profits.

Trump said he would impose the tariffs on his first day in office next year – a steep 25% tariff on imported goods from Canada and Mexico, while China's tariff on imported goods will be 10%.

The report warned that premium auto companies could face the highest costs, including companies such as Volvo and Jaguar, and that Trump's plans “will likely intensify the headwinds the global auto industry will face in an already challenging 2025," according to The Hill.

Other companies such as Stellantis and General Motors, which get a lot of their parts imported from Canada and Mexico, could also see higher costs cut into their profits. S&P noted that the companies could see more than 20% of their earnings at risk next year before interest, taxes, depreciation and amortization. 

Companies like Volkswagen and Toyota could see 10% and 20% of their earnings at risk, and companies such as BMW, Ford, Mercedes-Benz and Hyundai, which are more U.S. based, are estimated to see less than 10% of their earnings at risk.

Although Trump has warned about the tariffs, he has also been engaged in conversations about the plan with Mexico President Claudia Sheinbaum Pardo, who has threatened to retaliate with tariffs of her own if dialogue fails.

Misty Severi is a news reporter for Just The News. You can follow her on X for more coverage.