Big Auto’s Tariff Disruptions Look Oddly Familiar
A burst of vehicle buying in the first quarter echoed post-Covid trends. Rising costs for companies and prices for consumers point to pain ahead.
An industry in transition.
Photographer: Emily Elconin/Bloomberg
Big Auto made a rapid recovery from Covid-19, but President Donald Trump’s complications have no ready cure. Rather than use earnings season to throw their narrative forward, US autos have largely thrown their hands up instead this time. Guidance was cut or pulled altogether across the board in the face of Trump’s volatile tariff decrees. This is a self-inflicted supply shock and unlike the last one, the pandemic, there’s little in the way of a silver lining for Detroit.
Tariffs are a tax on consumers but a bonus for logisticians. Earnings calls were dominated by discussions about reconfiguring North American auto networks. Supply-chain teams got a lot more shout outs than usual and Lear Corp., the seating and electronics giant, was asked by mystified analysts if its components would qualify for Trump’s temporary tariff rebates on vehicles assembled in the US. Ford Motor Co. even boasted of using bonded carriers to transfer vehicles between Canada and Mexico without incurring US levies.