By In a paradoxical twist, Donald Trump’s proposed “America First” auto tariffs may actually hand Toyota, Honda, and BMW a competitive advantage over Detroit automakers, according to a Boston Consulting Group (BCG) analysis. Here’s why:
- Import-Reliant U.S. Brands: GM’s Blazer EV (made in Mexico) and Ford’s Bronco (Canadian production) would face the 25% tax, while…
- Domestic-Focused Foreign Factories: Toyota builds 76% of its U.S.-sold vehicles in American plants (vs. Ford’s 58%)
The tariffs could reshape market share:
- Japanese automakers gain 3-5% as their localized production avoids tariffs
- German luxury brands offset costs through higher price points
- Detroit Three lose $22 billion annually as price-sensitive buyers flee
“These tariffs would punish the companies they’re meant to help,” warned BCG’s Xavier Mosquet. “It’s economic friendly fire.”
Key Takeaways:
- U.S. automakers’ Mexican production (2.1M vehicles/year) would become uncompetitive
- Alabama, South Carolina (foreign-owned plants) could see employment booms
- Used car market may surge as new vehicles become unaffordable