Trump’s global tariffs disrupt auto trade: What it means for Indian OEMs

On an otherwise quiet morning in early April 2025, the global automotive industry was jolted by a single announcement from U.S. President Donald Trump. In his signature combative style, Trump declared sweeping 25 per cent tariffs on all imported automobiles and auto components, citing the need to “bring back American jobs and manufacturing pride.” What followed was a domino effect of reactions, recalibrations, and a scramble for new strategies – from Detroit to Delhi and from Shanghai to Stuttgart. While the tariff is aimed at reviving domestic production and reducing dependence on foreign imports, it risks disrupting trade flows, inflating vehicle costs, and deepening friction with global trade partners. For India, currently the third-largest automobile market after China and the United States, this development presents a complex mix of challenges and opportunities. Implementation Timeline: The Two-Phase Tariff StrategyUnder the executive order, all U.S. trading partners will first face a uniform 10 per cent tariff on automotive imports, effective April 5, with a secondary hike to the revised individual country rates, including India’s 26 per cent, coming into force four days later. Initially it sparked confusion over individual country rates, the U.S. administration has now clarified that India will face a 26 per