By Babatunde Yusuf, Canada
Lagos, Feb. 5, ’25 (TNZ) Sworn in on Jan. 20, Donald Trump is here again and already making waves as America’s 47th President. As a controversial president, his campaign promises and initial policy decisions have started sending shockwaves throughout many sectors.
The automotive industry is also feeling it. And this has made many analysts and experts predict its impacts on the global automotive industry.
As my memory would serve me, during his campaign period, he vowed to renegotiate or withdraw from existing trade agreements. For instance, he was critical of the North American Free Trade Agreement (NAFTA) and the Trans-Pacific Partnership (TPP).
He has also proposed imposing tariffs on imported goods, which could raise production costs for European automakers like BMW and Mercedes-Benz. These companies, without a doubt, have significant investments in the US and rely heavily on imports of parts and components.
The proposed tariffs will have major impacts on the global supply chain. The reason is that many automotive components come from countries like China, Japan and South Korea. These countries would most likely be subjected to tariffs too.
A deeper look at this means that it would lead to increased costs and potential disruptions to production. Automakers may also be forced to reassess their supply chains and consider sourcing components from countries that are not subject to tariffs.
Elon Musk, an electric car producer, is one of Trump’s right men. Despite this, Trump’s stance on electric vehicles (EVs) is also a concern for the industry. During his campaign, Trump expressed scepticism about the viability of EVs.
He even proposed to rescind unspent funds from the Inflation Reduction Act. A simple analysis of this means that his proposal would have an effect on EV cars like Tesla in the US and in the world at large.
Read Related News:
- Proximity to material informs FG’s citing auto industrial park in Osogbo – NADDC
- Podcast: Growing Gender Presence In Auto-Electrical Apprentice
- YabaTech, Omnicom partner on graduate training
- FG establishes 7 CNG conversion centres
- Tinubu directs MDAs to patronise NASENI tech products
Many European auto companies like Volkswagen and BMW, which have invested heavily in EV technology and are counting on the US market to drive sales would be greatly affected.
Well, developing nations like Nigeria with local automakers like Innosson may benefit from this tariff-based policy. This is because they will want to also slam high tariffs on cars and other products imported from America to their countries.
As a result, this will encourage the citizens of these developing countries to patronise locally-made cars.
However, as an influential world leader, the implications of Trump’s presidency extend beyond the US. European automakers, especially those with significant investments in the US, could face significant challenges.
The UK’s Society of Motor Manufacturers and Traders (SMMT) has called on the government to work with the Trump administration to find a solution that supports sector jobs. The SMMT has also warned that a “hard Brexit” could exacerbate the challenges facing the industry.
To surmise, the challenges posed by Trump’s trade and environmental policies would have an effect on the future of autonomous vehicles. His administration has yet to articulate a clear policy on autonomous vehicles and this could create uncertainty for companies investing in this technology.
Companies like Waymo and Tesla are at the forefront of autonomous vehicle development, but they need clear regulations and guidelines to continue investing in this area. (TNZ)
Yusuf, the CEO of Mapleby Autos, writes from Canada.
