S&P Global Mobility has reduced its 2025 U.S. sales forecast by 700,000 cars and light trucks due to President Donald Trump’s tariffs on imported vehicles. This adjustment marks one of the most significant changes the agency has made in a single month.
The tariffs, which were implemented earlier this month, are causing disruptions in the U.S. auto industry comparable to those experienced during the global COVID-19 pandemic and the collapse of Lehman Brothers. The forecasting agency initially anticipated the sale of 16.2 million light vehicles in the U.S. for 2025.
Stephanie Brinley, in a research note, noted that the impact of the auto tariffs, combined with a broader 10% tariff, resulted in an unprecedented alteration to the forecast, surpassed only by changes reacting to the 2020 global manufacturing pause due to COVID-19 and the 2008-09 financial crisis.
At the end of the previous year, S&P Global Mobility had anticipated mild growth of 1.2% in U.S. auto sales over the prior year’s nearly 16 million vehicles, citing continued high prices and consumer uncertainty. With the recent sales estimate reduction, the global light vehicle sales forecast is also expected to decrease by a total of 1.3 million vehicles, from a previous estimate of 89.6 million.
The tariffs, which took effect on April 3, impose a 25% duty on all fully built imported vehicles. Additionally, there are other tariffs, including paused “reciprocal” tariffs that vary depending on a country’s trade balance with the U.S. As a result, several automakers, such as Volkswagen, Audi, Mitsubishi Motors, and Jaguar Land Rover, have halted new vehicle shipments to the United States. Jaguar Land Rover, which sells a significant portion of its products in North America, has also stopped exports.
Brinley noted that the tariffs could have a substantial immediate impact on global sales and production, particularly affecting the U.S. and North America.
President Trump recently hinted at considering relief measures for car manufacturers, though this development has not been included in Brinley’s analysis due to the rapidly changing situation. The future of the administration’s tariff strategy remains uncertain, with Trump previously adjusting the timeline, such as the one-month extension granted in February.
Commerce Secretary Howard Lutnick stated on ABC’s “This Week” that sectoral tariffs are not designed to negotiate concessions. Rather, they are strategic, aimed at reshoring production in key industries rather than generating revenue to offset planned tax breaks, including an extension of the 2017 tax cut. The White House noted that only about half of the vehicles sold in the United States are made domestically, a situation that threatens both the domestic industrial base and national security.
This report was originally published on Fortune.com.
