AutoTechInsight
Rapid Response: Impact analysis of US automotive tariff actions - Issue #19
In this latest edition of Rapid Response, we analyze how:
# The US reaches investment agreements with Japan, South Korea
# The US and China ease tensions back with delayed, suspended tariffs and non-tariff barriers
# The Nexperia situation is creating a critical risk for global automotive production
Despite all of the above, there has been no significant impact to S&P Global Mobility sales, production forecast assumptions.
During the last week of October, US President Donald Trump visited multiple countries in Asia, and furthered trade deals with South Korea and Japan. Though an agreement of sorts with mainland China was also announced, much of it centered on extending suspended tariffs and non-tariff trade barriers for another year, versus forward progress.
The US and mainland China have announced trade and tariff modifications effective until Nov. 10, 2026. That said, Section 232 tariffs appear unchanged, nor has the US agreed to revive the de minimus exemption for packages from mainland China under US$800 in value. All in all, the US and China have not established a new trade framework or deeper cooperation but agreed to ease tensions and address some immediate issues surrounding semiconductors, critical raw materials, and rare earths. China’s export restrictions and barriers on these issues have affected global trade and could cause significant disruption in multiple industries. This agreement reduces risk for the next year, though reliance on mainland China sourcing remains a concern.
US' sectoral tariffs on metals (steel, aluminum, copper) or the automotive industry (auto parts, vehicles) are unchanged. The 100% tariff on electric vehicles imposed under the previous US administration remains unchanged. In response to mainland China’s new measures regarding fentanyl-related chemicals, the US will lower the fentanyl tariff by 10%. Initially set at 25%, it was raised to 35%. The heightened 34% reciprocal tariffs imposed on China in April and suspended in May remains suspended, while a 10% reciprocal tariff stays in place. Both suspensions will last until Nov. 10, 2026.
S&P Global Mobility's next light-vehicle production forecast will be issued in mid-November. However, the trade situation has not yet brought anything to the forefront which will create a meaningful change to the 2026 sales and production forecasts.
