In the early morning of November 6 local time, former US President and Republican presidential candidate Donald Trump delivered a speech at the Palm Beach Convention Center in Florida, announcing that he had won the 2024 US presidential election and would be elected the 47th president of the United States.
According to estimates by the US media, Trump currently has 277 electoral votes, more than the 270 needed to be elected president.
Fox News, NBC, the New York Times, Capitol Hill and decision Station headquarters, a US election forecaster, have all announced Trump’s victory.
Fox News declared Trump victorious.
photo: Fox News website, Trump continues to strongly advocate the protection of domestic manufacturing, especially the auto industry during the election.
After he is elected, he will to a large extent continue the policy of his last term, which will have an impact on the global automobile industry, especially on the competition of the automobile industry between China and the United States, the tariff trade policy, the development of electric vehicles and the reshaping of the global automobile supply chain.
Source: Donald Trump’s official website, 1: impact on the domestic auto industry, 1.
When the auto industry returned to the United States, Trump said during the campaign that under the leadership of the Biden administration, the US auto industry was suffering a heavy blow and an outflow of the auto industry, and he promised to quickly restore the domestic auto industry.
Trump’s approach is to impose tariffs on foreign imports.
“for me, the most beautiful word in the dictionary is’ tariff’.
” Trump said during the campaign that if he is successfully elected as the next president of the United States, he will impose “the highest tariffs in history” on imports, 60% on all Chinese imports, 20% on imports from other countries, and other tariffs on countries that no longer use dollars.
As for the auto industry, Trump said he would impose a tariff of 200% or even 1000% on Chinese-made cars and more than 200% on vehicles imported from Mexico.
Trump said: “the specific tax rate is really just a number.
I don’t care how much, but the tax rate I set will make it impossible for cars imported from China or Mexico to sell in the United States.
” I don’t want these imported vehicles to damage the interests of American car companies.
” Trump believes that imposing high tariffs on imported cars is the only way to force automakers to move their factories back to the United States.
“I will let these car factories be built in the United States, and our workers will work for them.
” Trump’s policy may prompt companies to rethink the layout of their production bases, and some carmakers may move their production lines back to the United States to avoid tariff risks, which will help boost economic growth and jobs in the United States.
But at the same time, it could also drive up production costs for companies, especially for carmakers that rely on parts and raw materials from China or other low-cost countries. , 2. To cut subsidies for electric vehicles and hinder the electrification transformation in the United States, the Biden government’s inflation reduction Act currently promotes the development of the domestic electric vehicle industry by providing 369 billion dollars worth of subsidies and tax incentives for green technologies such as electric vehicles and batteries, and plans to make electric cars account for 50 percent of total passenger car sales in the United States by 2030.
However, Trump has attacked the Biden administration’s electric vehicle subsidy policy more than once, saying it will only benefit foreign companies, not US carmakers.
Trump has said many times during the campaign that he will take steps to overturn or completely abolish this policy.
Mr Trump has made no secret of his contempt for electric cars, declaring that they do nothing but that the transition to electric cars is a “job killer” that will hurt American auto workers.
According to an analysis by the Global Automotive Research Institute, Trump may hinder the development of electric vehicles in a variety of ways after taking office, such as relaxing fuel consumption regulations, cutting tax credits for electric vehicles, industrial subsidies, and slowing the construction of charging infrastructure.
From the enterprise level, this will further aggravate the competitiveness disadvantage of traditional American car companies in the field of electric vehicles, and at the same time, it will affect the electrification investment achievements of many foreign enterprises in the United States, and the local layout of Chinese power battery enterprises will slow down at the same time.
At the industry level, this will undoubtedly prevent many potential consumers from buying electric cars, leading to a decline in overall sales of electric vehicles in the United States and a slowdown in the electrification of the US car market.
However, there is also a view that, while Trump has always been opposed to electric cars, the presence of his best-known supporter, Tesla CEO Elon Musk, may slightly ease any move that hinders the popularity of electric cars after Trump’s election as president. , 3. Emission targets and vehicle fuel economy standards have been withdrawn.
In March this year, the US Environmental Protection Agency (EPA) officially issued emission standards for new vehicles in the United States from 2027 to 2032, requiring US light passenger vehicles, including cars, SUV and pickups, to reduce their average emissions of greenhouse gases such as carbon dioxide and air pollutants by nearly half from 320g per mile in 2023 to less than 85g per mile by 2032.
To meet the target, automakers may need to increase sales of their pure electric vehicles to 56% by 2032, compared with 13% for plug-in hybrids and 29% for conventional fuel vehicles, according to EPA.
However, Trump also scoffs at this standard because he is a typical climate sceptic who believes that climate change is a “green hoax” and instead advocates “maximizing fossil fuel production”.
As early as his last term, he repealed many of the environmental regulations introduced during the Obama presidency, including “deregulating” fuel economy and emission standards for new cars, and banning California from setting stricter emission standards for new cars.
Therefore, it is not difficult to speculate that during his latest term, Trump will also overturn or repeal a series of environmental policies such as the Biden administration’s emission standards for new cars, and will once again abolish California’s right to independently enact vehicle emission and fuel efficiency regulations.
In this context, the fuel consumption compliance pressure and emission reduction pressure of traditional American car companies will be reduced, so that the internal combustion engine business will be further boosted, and car companies may further adjust their electric vehicle production plans to produce more internal combustion engine cars.
this will affect the plan to ban the sale of fuel vehicles in 11 states of the United States by 2035.
However, some research companies predict that if emission standards remain loose, sales in the US auto industry will grow by 6 per cent. , 4. Labor and labor relations have deteriorated, and industry insiders believe that among the many problems related to the automobile industry, labor and laborCapital relations will be a cause for concern, of which the United Auto Workers (UAW) is the key.
Photo: UAW, UAW President Fain openly supports Harris, but the relationship with Trump is full of gunpowder.
Trump and Fain have blamed each other on social media and in public.
For example, Trump criticized Fain’s leadership on social media, arguing that he did not win enough benefits for workers, while Fain hit back at Trump, accusing him of being unfavorable to workers on workers’ rights and economic policy.
After Trump is elected, he may, as always, be more biased towards enterprises in terms of industrial relations, and his policy of promoting a further reduction in corporate income tax from 21% to 15% and deregulation will help enterprises to reduce operating costs rather than protect workers’ rights and interests, which may weaken the increasingly powerful influence of UAW in organizing trade unions and fighting for workers’ rights.
So as to alleviate the greater pressure on automobile enterprises in terms of cost and competition.
However, in the long run, if it is difficult for trade unions to force enterprises to meet wage and welfare requirements, the labor contradiction with car companies may also be further intensified.
Second, the impact on China’s auto industry, Trump has always adhered to his position on China.
His trade policy in the auto industry, including imposing high tariffs on Chinese cars and their parts, is one of the direct impacts on the global auto industry since he took office. , 1. To crack down on Chinese cars, especially electric vehicles, the Biden government currently imposes a 100% tariff on Chinese-made electric vehicles, a 50% tariff on solar cells and semiconductors, and a 25% tariff on vehicle batteries, key minerals, steel, aluminum, masks and port cranes.
Most of them came into effect on September 27, and tariffs on semiconductors and natural graphite will be implemented in 2025 and 2026, respectively.
After Trump takes office, there is a good chance that this policy will continue, even threatening to impose a 200% or even 1000% tariff on cars imported directly from China.
In addition, Trump’s proposal to impose a tariff of more than 200% on imported cars from Mexico is actually aimed at Chinese imported cars.
In Mr Trump’s view, Chinese carmakers’ establishment of production bases in Mexico and exports of cars to the US pose a huge threat to the US auto industry.
Trump’s tariff stick, on the one hand, makes Chinese automakers face higher tariff barriers, further prevents Chinese automakers from expanding in the United States, curbs Chinese car exports, and at the same time raises the tariff costs for Chinese parts companies to export to the United States.
On the other hand, the Global Automotive Research Institute believes that this move actually completely blocks other ways for Chinese car companies to enter the US market, because in the future, whether Chinese car companies are produced in China, Mexico or other countries, will be subject to high tariffs when exported to the United States.
However, Gaishi Automotive Research Institute pointed out that at present, China exports fewer vehicles to the United States, with only 61000 passenger cars exported to the United States from January to August in 2024, accounting for only 1.
7 percent, so it is less directly affected by Trump’s tariff policy.
by contrast, spare parts products are more affected, because currently China exports mainly auto parts to the United States, with a value of US $12.
1 billion from January to August 2024. , 2. The crackdown on the software and hardware of China’s Internet-connected cars has prompted other countries to emulate the Intelligent Internet Security Review.
For national security reasons, the US Department of Commerce has proposed banning the use of Chinese software and hardware in Internet-connected cars and self-driving cars on US roads.
The ban on Chinese software will take effect in 2027 models and the ban on Chinese hardware will take effect in January or 2030 models in 2029.
Prior to this, the US government has approved the final proposal for the above regulations.
In terms of Smart Internet connected cars, Trump and the Biden administration are actually on the same front, and after Trump takes office, he is expected to continue to promote the landing of US legislation on car safety in China.
Earlier, Canada, led by the United States, also considered banning the use of Chinese software in cars.
The Global Automotive Research Institute pointed out that in the future, not only Canada, the European Union and other western countries may also follow the example of the United States and introduce more stringent intelligent Internet access regulations.
This will not only increase the access barriers and compliance costs of China’s intelligent Internet connected vehicles and their software and hardware in overseas markets, but also make it more difficult for Chinese enterprises to enter European and American markets.
The impact on the product development and definition of data privacy security and compliance security of smart vehicles will be enormous, forcing Chinese smart car companies to make comprehensive adjustments and optimization in terms of technology, compliance and market strategies. , 3. By tightening blockades on sophisticated technologies such as chips and export controls on China, Trump began imposing chip sanctions on Chinese technology companies as early as his first term in 2018, and this trend is expected to continue in his second term.
even export controls on high-tech industries such as chips, advanced materials and manufacturing equipment are likely to be further intensified.
Not only the United States, but the United States may also require Japan and the Netherlands, which have advanced chip technology and advanced equipment, to further tighten controls on exports to China.
The Global Automotive Research Institute believes that after Trump takes office, export restrictions on the US chip industry may be increased in order to crack down on the development of China’s new energy vehicles.
However, everything has two sides, and the regulation of chips, advanced manufacturing equipment and materials in the United States is expected to force domestic related industries to usher in a new round of accelerated development.
stimulate domestic enterprises to have independent control and self-research breakthroughs in core technology and core manufacturing equipment. , 4. It directly or indirectly affects the overseas expansion of Chinese car companies.
The trade barriers and technology restrictions of the Trump administration not only prevent Chinese car companies from entering the United States, but also hinder the global expansion of Chinese car brands by imitating the policies of other European and American countries.
However, due to restrictions in the US and Europe, Chinese carmakers are likely to turn their attention to other emerging markets, such as Southeast Asia, Latin America and Africa.
Although the market size of these regions is relatively small, they have great potential for growth and a relatively loose policy environment.
In addition, after taking office, Trump will end US aid to Ukraine and promote a negotiated end to the war between Russia and Ukraine.
The Gaishi Automotive Research Institute believes that after the end of the war between Russia and Ukraine, the sanctions imposed by Western countries on Russia may also be lifted, and the original European and American, Japanese and Korean car companies in the Russian automobile market may return.
In the future, the growth space of Chinese car companies in Russia may be greatly affected.
Similarly, after Trump takes office,With the end of weapons and financial support for the Israeli-Palestinian conflict and the end of the war, energy costs in Europe are expected to fall, and the superimposition of European countervailing duties on Chinese electric vehicles will not be conducive to the promotion and acceptance of Chinese electric vehicles in the European market.
However, the Global Automotive Research Institute pointed out that if the situation in the Middle East is relaxed, it will be conducive to the export of Chinese cars to the region.
Third, the impact on the Mexican automobile industry.
For decades, under the North American Free Trade Agreement and the US-Mexico-Canada Trade Agreement, almost all goods sold at the border between the United States and Mexico do not have to pay any tariffs.
As a result, about 4/5 of Mexico’s exports go to the United States, with Mexico’s exports to the United States reaching 475 billion U.S. dollars last year alone.
Among them, cars and auto parts are one of Mexico’s main exports to the United States.
However, Trump has threatened to impose tariffs of more than 200 per cent on Mexican-made cars, a policy aimed at China, but will also cause accidental damage to Mexico’s local auto industry.
The first is the impact on Mexican vehicle exports.
Mexico is the world’s fourth largest exporter of light vehicles, and its low manufacturing costs make it an important production base for major carmakers.
Many of the models for the American market are made in Mexico and are designed to enjoy low-cost Mexican labor and tariff concessions under free trade agreements.
According to the data, about 88% of cars made in Mexico are exported, of which 76% are sold to the United States.
If Mr Trump imposes high tariffs, the prices of these models will rise sharply and US consumers will turn to other alternatives, leading to a sharp drop in demand for Mexican car exports.
Second, it will affect Mexican car production.
Mexico is the seventh largest producer of passenger cars in the world.
As the United States is the largest market for Mexican car exports, the increase in tariffs will directly affect Mexico’s car production.
The reduction in production orders will lead to a sharp decline in the production capacity of local factories in Mexico, and even shutdowns and layoffs.
The third is to affect the investment confidence of foreign enterprises in Mexico.
Most of the investment in Mexico’s auto industry comes from international auto giants, which generally see Mexico as a low-cost and efficient production base, especially a bridgehead for exports to the United States.
The threat of high tariffs will lead to a decline in foreign investment confidence, and many companies may re-evaluate their production and investment plans in Mexico and consider moving their production bases to other more cost-effective regions.
this will weaken Mexico’s position as a global car manufacturing and export center, leading to a reduction in long-term capital outflows and technology investment.
In addition, the threat of tariffs will also affect Mexico’s ability to attract new investment, and car companies will take a wait-and-see attitude towards expansion in Mexico.
Reduced foreign investment will limit the long-term development potential of Mexico’s auto industry.
Fourth, the impact on the European auto industry.
Trump said in a speech at the Chicago Economic Club on October 15 that if he was re-elected, he would also impose high tariffs on imported cars from Europe.
Trump specifically named and criticized European carmakers and promised to impose heavy taxes on these imported vehicles in order to force production back to the United States.
At the time, Trump said, for example, that Mercedes-Benz’s production activities in the United States were only assembly work, and that this mode of production was unfair to American workers.
Currently, the European Union imposes a 10% tariff on imported cars, while the United States imposes a 2.
5% tariff on EU-made vehicles, but a high 25% tariff on light trucks and pickups.
Therefore, some studies believe that European exports that may be affected by US tariff adjustments will be high-end SUV and cars.
Among them, German car companies will be the most affected.
According to Morgan Stanley research, non-local US sales of German brands such as BMW, Audi, Mercedes-Benz and Porsche are the highest, with Porsche’s US sales all in Europe, accounting for 25 per cent of its group’s sales, compared with 8 per cent for BMW and Mercedes, 3 per cent for Volkswagen (indirectly affected by Porsche), 1 per cent for Stellantis and 0 per cent for Renault.
Morgan Stanley pointed out that the impact of higher tariffs on sales could lead to a 2% decline in EBIT (earnings before interest and tax) of major European automakers by 10%, and could further aggravate the profit adjustment of car companies.
However, European manufacturers can evade tariffs by setting up more factories in the United States.
If Mr Trump succeeds in reducing corporate income tax from the current 21 per cent to 15 per cent of 20 per cent, the positive impact of European car companies with factories in the US could offset the negative impact of tariffs.
Fifth, the impact on the global automobile supply chain, from the perspective of the global automobile supply chain, if Trump’s high tariff policy is implemented, it will have a profound impact on the global division of labor in the automobile industry.
and may lead to a major adjustment of the supply chain structure of automobile manufacturing enterprises.
The increase of tariff policies and trade barriers will lead to the overall impact of the following aspects: 1.
Supply chain efficiency and flexibility are limited: the global automotive supply chain is essentially highly integrated to meet local market needs with the lowest cost, best efficiency and maximum flexibility.
However, the implementation of tariff measures will push up international transport and cross-border transaction costs, forcing many multinational carmakers to reassess the feasibility of existing supply chain networks. , 2. Increased supply chain risk and vulnerability: an important advantage of the global supply chain is that geographical dispersion can mitigate risks, but policy uncertainty and new tariff measures will force enterprises to centralize the supply chain and reduce cross-border dependence.
Once the supply chain becomes more centralized, problems in any one link can lead to serious supply chain disruptions, which will significantly increase the fragility and uncertainty of the supply chain. , 3. The trend of regionalization and reorganization of the supply chain, in the face of the cost pressure caused by high tariffs, automobile manufacturers will have to consider a more regional production and supply chain structure to reduce the impact of tariffs and trade restrictions, which will lead to the gradual transfer of the global supply chain to regionalization and weaken the integration advantage of the global supply chain.
This trend of “de-globalization” will also reduce technology exchange and resource sharing between different markets, affecting the speed of innovation and product quality of the global automobile industry.
In this context, multinational automakers need to assess the regional distribution of the supply chain and reconstruct the supply chain management strategy to meet the long-term challenges brought by policy changes.
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