How will Trump tariffs affect Alabama’s automakers?

How will the Trump Administration’s new 25% auto import tariffs affect the companies which manufacture cars in Alabama?

That’s still being sorted out.

The duties announced Wednesday are expected to impact the auto industry as a whole, with analysts predicting they will drive up prices on even U.S. manufactured vehicles that rely on auto parts from global supply chains.

The tariffs, which the White House expects to raise $100 billion in revenue annually, are set to begin in April.

Trump says the tariffs, which are taxes paid by companies to sell goods in the U.S., will lead to more factories opening in the United States.

Trump on Wednesday called them “very modest” and “permanent.”

According to Axios, about 45% of U.S.-sold vehicles are imported, with the largest percentage coming from Mexico and Canada. Every 2025 model-year vehicle gets at least 20% of its content from countries other than the U.S. and Canada.

Mazda makes the lowest share of its U.S.-sold vehicles in the U.S., at 19%. Mazda manufactures its CX-50 SUV in Huntsville.

Hyundai, with its factory in Montgomery, makes about 33% of its vehicles in the U.S., while Mercedes, with a plant in Tuscaloosa County, makes 43% and Toyota 48%. Toyota shares its joint manufacturing plant in Huntsville with Mazda, making the Corolla Cross compact SUV.

According to GOBankingRates, among the companies that could be most affected by the tariffs are Honda, Toyota and Mazda.

The tariffs have already had some effect on decisions. Earlier this week, Hyundai announced $21 billion in investments in U.S. manufacturing, while Mazda has floated the idea of moving more of its production to Alabama in response to the tariffs.

According to the White House, the 25 percent tariffs will only apply “to the value of their non-U.S. content,” meaning they will only impact the parts of the vehicles that are not made in the U.S.

But analysts say this will impact even U.S. companies, as some source parts from Canada and Mexico through extensive supply chains.

Mercedes-Benz Group, along with Porsche, will be hit hardest by the tariffs, facing an impact of an estimated $3.7 billion together on their imported cars.

The tariffs could wipe out around a quarter of Porsche and Mercedes’ projected 2026 operating earnings, according to Bloomberg Intelligence. To offset the impact, manufacturers may have to raise prices or shift more production to the U.S., the outlet reported.

German carmakers are most at risk as they send more vehicles to the U.S. than to any other country.

The head of the European Automobile Manufacturers’ Association called on the U.S. and the European Union to find an “immediate resolution.” The association represents 16 different automakers, including Mercedes-Benz and the European divisions of Hyundai, Honda and Toyota.

“European automakers have been investing in the US for decades, creating jobs, fostering economic growth in local communities, and generating massive tax revenue for the U.S. government,” said Director General Sigrid de Vries. “Tariffs will not just impact imports into the US, a penalty that American consumers are likely to pay, but measures on automotive parts will also hurt auto makers producing cars in the US for export markets.”

The association pointed out that European manufacturers export between 50% and 60% of the vehicles they make in the U.S.

Newsweek, citing a cars.com index of the most American-made automobiles—based on their assembly location, parts content, engine origin and transmission origin. Four of the top 20 were manufactured in Alabama, with all manufactured in Lincoln.

Honda’s Passport SUV, Odyssey minivan, Ridgeline pickup and Pilot SUV all made the list.

Earlier this month, a Mercedes-Benz spokesperson would not comment on the specific logistical issues caused by tariffs for its Alabama factory, but said that “barriers which restrict free trade should not be newly created but removed instead.”

“Free trade and fair competition ensure prosperity, growth and innovation,” the spokesperson said.

“If a general trend towards protectionism gains a foothold, this has negative economic consequences for all stakeholders involved. Mercedes-Benz therefore supports a trading order based on (World Trade Organization) rules that promotes a level playing field. This includes the principle that all participants find the same conditions.”