Trump’s EPA Is Hurting the Automakers It’s Claiming to Help
The Trump administration has now taken a chain saw to just about every subsidy and regulation that might have forced U.S. automakers to get with the times. Republicans’ One Big Beautiful Bill Act slashed subsidies for electric vehicles and nixed fines for automakers that fail to meet federal fuel efficiency standards. Those are administered by the Department of Transportation, which is currently reviewing them for possible overhaul. Although U.S. automakers have long chafed at federal mandates to clean up their cars, they don’t love rules that change every four years, either. As China continues to churn out cheaper, flashier models for customers at home and abroad, the subsidies and regulations now being demolished by the Trump administration might have pushed U.S. automakers to keep pace with competitors making their big, expensive, gas-guzzling models less appealing to buyers worldwide.
Among U.S. automakers’ biggest worries, though, are tariffs. The White House’s recently announced trade deals with Japan and the European Union subject cars imported from those places to lower tariffs (just 15 percent) than those imported from Canada and Mexico, including those shipped by U.S. companies that make a sizable percentage of their vehicles there. Canadian and Mexican imports are currently charged a 25 percent entry fee, which is set to rise on Friday, to 35 percent for Canada and 30 percent for Mexico. Cars built here also now have to factor in a 25 percent fee on imported parts—save for those that comply with the terms of the U.S.-Mexico-Canada trade agreement—plus a 50 percent tariff on imported steel and aluminum. An additional 50 percent levy on copper is set to be implemented on Friday, as well.
The blow comes to an industry already facing serious headwinds. Ford, GM, and Stellantis—the European company that owns Jeep, Chrysler, and several other legacy U.S. brands—were already struggling to adjust to a global auto market whose center of gravity has shifted toward China. Just this week, Stellantis announced that its revenues for the first half of 2025 were down 13 percent compared to the same period last year. GM’s second-quarter earnings took a $1.1 billion hit; the company projects that it could lose up to $5 billion from tariffs this year.
