Tariff Tango Update, May 2025: The Circus Continues
- LeeAnn Shattuck
- May 16
- 3 min read
Hold onto your lug nuts, folks — the international tariff rollercoaster just took another hairpin turn. After months of economic whiplash, finger-pointing, and price hikes, here’s what’s going down in the latest episode of Trade Wars: Auto Edition.
The Big “Truce” (aka Temporary Timeout)
Just when you thought the slap-fight between the U.S. and China couldn’t get more ridiculous, they called a 90-day timeout. Tariffs are dropping — a little — but clarity is still missing in action.
The U.S. and China have agreed to stop slapping each other with tariffs like toddlers with pool noodles — at least for 90 days.
U.S. tariffs on Chinese goods drop from a bonkers 145% to a still-eye-watering 30% by May 14.
China drops its retaliatory duties on U.S. products from 125% to 10%.
It is unclear what impact the 90-day truce will have on auto imports and exports between the two countries, but fingers crossed 🤞.
Meanwhile, on American Assembly Lines...
Automakers are either bracing for impact, hiking prices, or booking therapy sessions. Because navigating tariff chaos while trying to build cars is like assembling IKEA furniture during an earthquake.
Mercedes-Benz is going ahead with plans to build the GLC small luxury crossover in Alabama in 2027. Because who needs certainty when you have Southern hospitality?
Even Audi is eyeing U.S. production to dodge tariffs — the VW Chattanooga plant may soon get a Q4 E-tron cousin to the VW ID.4, which shares the same platform.
Volvo is trimming 5% of its U.S. workforce thanks to “market conditions” (read: this tariff mess), cutting 125 of the 2,500 employees at its plant in Charleston, South Carolina.
Ford is raising prices up to $2,000 on Mexico-built Mustang Mach-E, Maverick, and Bronco Sport due to tariffs. Big surprise.
GM, Toyota, and Honda are crying into their spreadsheets, forecasting billions in tariff-related costs and plummeting profits for 2025.
Subaru says “screw it” and will stop sending American-built Outback SUVs to Canada by 2026. Japan gets the job instead, because it's now cheaper to ship cars 4600 miles across the globe than 500 miles across the US-Canada border. 🤷
The Brits Get a Break (Sort Of)
Jaguar-Land Rover had hit pause on all U.S. shipments thanks to the tariff tantrum — opting instead for the classic British approach: stiff upper lip, Keep Calm, and wait for the chaos to sort itself out. Turns out patience paid off, as Trump has now agreed to slash tariffs on most U.K. vehicles down to 10%.
British automakers will be allowed to export 100,000 vehicles to the U.S. each year at the reduced tariff rate.
Jaguar-Land Rover has smugly resumed shipping their bougie SUVs across the pond.
Bentley is still holding off on U.S. shipments while waiting for someone to explain how the 100,000 tariff-reduced slots will be divvied up among U.K. automakers.
What About Mexico and Canada?
While the Brits get a discount, our North American neighbors are left holding the tariff bag. The American Automotive Policy Council is fuming, asking why U.K. cars — with little to no U.S. content — are getting tariff breaks while Canadian and Mexican vehicles that meet USMCA rules are still hit with the full 25%. Their argument? It’s now cheaper to import a U.K. car than a North American one—because logic is apparently optional in politics.
Tariff Reimbursement... Kinda?
The White House says carmakers can apply for tariff reimbursements. Automakers say, “Thanks, I guess?” Meanwhile, the details are buried somewhere in Customs & Border Protection red tape. Automakers might get reimbursed for tariffs on parts worth up to 15% of a car’s value (10% in year two). The White House is calling it “help.” The industry is calling it “a Band-Aid on a bullet hole.”
Bottom Line:
The tariff saga is less of a strategic policy and more of a soap opera at this point. Car prices are rising, manufacturers are confused, and consumers are left wondering if it’s cheaper to ride a goat to work. Stay tuned — or better yet, stay informed.
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👉 Want to protect your wallet from this tariff-fueled chaos? Check out my online course: The No BS Guide to Buying a Car — because the best defense is knowing exactly how (and when) to buy smart.
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