Trump reciprocal tariff impact on auto industry

DIGITIMES observed that with the US federal government announcing a 25% tariff on imported automobiles and auto parts effective April 3, 2025, Taiwan's automotive supply chain industry faces unprecedented challenges, particularly affecting auto parts manufacturers significantly.

DIGITIMES conducted a detailed analysis of the new tax regulations and HTSUS tariff schedule, comprehensively assessing the impact on major Taiwanese manufacturers under the new US tariff policy. It was determined that three key variables would measure the extent of the impact: the proportion of revenue from the US market, the presence of local production capacity in North America, and whether products fall within the taxable list.

The focus of the new US tariff policy lies in its imposition of tariffs on as many as 130 HTSUS codes for auto parts, covering nearly all categories of automotive components. Furthermore, according to the provisions specified in the Federal Register, any auto part not compliant with the origin rules of the US-Mexico-Canada Agreement (USMCA) will incur a 25% tariff regardless of the exporting country. Notably, over 50% of Taiwan's exported auto parts are shipped to the US, making the impact particularly pronounced for Taiwanese manufacturers reliant on the US market.