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Rebounding US auto imports caught in tariff crossfire

By Bill Mongelluzzo

US trade in automobiles and auto parts could shift into reverse gear this year after a strong 2024 amid higher tariffs and other trade policies expected to weigh on consumer vehicle demand and overall economic growth.

The auto sector experienced a strong fourth quarter after mild growth for much of the year, said Chris Hopson, manager of North American light vehicle sales forecasting at S & P Global Mobility. S & P Global is the parent company of the Journal of Commerce.

“ For light vehicles, this is not good. Parts will be taxed even more.”

However, 2025 started off with economic headwinds. Dealers are raising prices, which is already having an impact on sales, and uncertainty over the administration’ s tariff policies is expected to continue into the fall, which will complicate buying decisions, Hopson said.

“ For light vehicles, this is not good,” he said.“ Parts will be taxed even more.”

After rebounding 11.6 % last year, containerized US auto imports have declined on an annual basis for three straight months to begin 2025, according to PIERS, a sister product of the Journal of Commerce within S & P Global. Through

Auto sector imports tapping the brakes in early 2025

Containerized US light vehicle and automobile parts imports, in laden TEUs, with year-over-year change

TEU volume

Source: PIERS, S & P Global

TEU

Year-over-year % change

Year-over-year % change

© 2025 S & P Global

March, those shipments have slipped 2.1 % compared with the first quarter of 2024.

Automobile production in the US depends upon the shipment of parts and components from Asia, Europe, and Canada and Mexico. Tariffs can add significantly to the final cost of light vehicles.

“ You end up with stacked tariffs,” said Paul Bingham, director of transportation consulting for S & P Global Market Intelligence. Auto sector demand is closely correlated with overall economic growth, and recently downgraded forecasts for US GDP growth do not inspire confidence. S & P Global’ s initial projection of 2.2 % growth in US GDP this year has been downgraded every month since January; as of April, analysts expect US GDP to rise just 1.5 %.

And if tariffs on imports of automobiles and parts from Mexico, Canada, China and other countries increase during the year,“ the risk is very high” that US economic growth could slow further, Bingham said.

‘ A lot comes from China’

A 145 % tariff on imports from China imposed by the Trump administration is likely to cause some sourcing of automobile parts and components to shift to other countries in Asia and North America.

Further complicating the delivered cost of light vehicles and components is the US Trade Representative’ s planned Section 301 remedy of charging Chinese-operated and-built ships as much as $ 1 million per US port call. The Section 301 port fee will not impact vehicles or components manufactured in North America,“ but a lot comes from China,” Hopson noted.

Mainland China accounted for 37.2 % of containerized auto sector imports last year, followed by South Korea( 17.1 %), Japan( 11.6 %) and Germany( 6.6 %), according to PIERS.

Hopson said he had not yet seen any significant shift of production of auto components and parts away from China, adding that for single-source importers, such a shift would take months. For consumers, that means vehicle prices will likely continue to rise in the short term, putting downward pressure on demand.

Although some importers in the auto sector have pulled forward as much product as they can this year, time is running short.“ Auto inventory turns pretty quickly,” Hopson said. On a positive note, Hopson said that US importers have logistics plans in place to deal with supply chain

34 Journal of Commerce | May 5, 2025 www. joc. com