The trade agenda of the second Trump administration has created a lot of interest in the American-made content of cars sold in the U.S. As many analysts and industry leaders have pointed out, a car that’s built within the borders of the U.S. isn’t totally immune to new tariffs, since parts are sourced from all over the world. A new report in CNBC breaks down why it’s harder and costlier than it sounds to build a 100-percent made in USA vehicle.
With the current tariff landscape, building a car in the U.S. that’s sold in the U.S. is still preferable to importing a whole car from another country. However, all three Detroit automakers that build cars in the U.S. source a significant volume of parts from foreign countries, especially the North American neighbors of the U.S. in compliance with USMCA. This raises the question: why don’t automakers just move the part sourcing to the U.S.?
“Some parts that have been offshored will still be cheaper to manufacture in those locations rather than the USA at scale, even with some of the imposed tariffs,” said Martin French, a longtime supplier executive and partner at Berylls Strategy Advisors USA. In other words, in some cases, importing parts and paying the tariff is still cheaper than making supply chain changes to source parts in the U.S.
“The cost gets quantumly more […] the closer you get to 100 percent [made in USA],” Mark Wakefield of consulting firm AlixPartners said. “Getting above 90 percent gets expensive, and getting about 95 percent would get really expensive, and you just start getting into things that you’d have to take a long time [to do].”
“I don’t think you could do it more than about 95 percent on average, at any cost, at the moment, just because you need to build a lot of stuff that’s going to take a long time,” he said. “The processing and the raw material stuff, it takes a really long time, because those are multibillion-dollar facilities that process it.”
Although cars with high made in USA ratios aren’t immune from tariffs, it’s noteworthy that GM fares quite well in the annual Made in America Auto Index from the Kogod School of Business. On the 2024 list, the Missouri-built Chevy Colorado and GMC Canyon tied for seventh place on the list with a Total Domestic Content score of 75.5 out of a possible 100. Other GM models that performed well on the most recent list are the Kentucky-built Chevy Corvette, the Michigan-built Cadillac CT4 and Cadillac CT5 sedans, and the Texas-built full-size SUVs.
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Are these supposedly smart people not paid the big bucks to solve difficult problems?
Done with these analysts. Didn’t they also predict Tesla’s collapse on multiple occasions??? Maybe their useless???
GM has built cars & trucks 100% before and they can do it again.
When was that?
Right through the early 1990s
There is one cause for these issues…TRUMP…he did it all by himself on Liberation Day.
Then how do you explain the 25 percent increase in the average price of a new car from 2021-2025?
Dear misgiuded tigger. Cost of everything went up. Fuel. wages, taxes. transportation to get them to plants, insurance, profit( not a bad word) goes in to new equipment,computers etc. Which planet do you live on that you do not understand these
basics??? Not saying you are a AIR HEAD of course. Just misguided. Please take a course in economics. Then get your head together Please
Right on Papa. Older people know best. Youngins need to ask for your wisdom.
Look at history. Bravo.
Nobody is expecting a car to be made 100% in the USA, but hyperbole is being to discredit the attempt to make more cars in the US. Make your cars and major parts here, and the tariffs will be low, plus you’ll get a 15% corporate tax rate. GM has increased production in IN. Ford is adding to their US footprint. Hyundai is expanding as well.
Kenny/Tigger. Sorry. Clarification. General Motors came to inception with both American and Canadian companies joining. Oshawa/Canada has been building “GM” Vehicles and Parts for well over 100 years. I don’t know when GM moved into Mexico but it wasn’t yesterday. There was a large number of years (decades) where Oshawa Stamping/Plastics built some parts that went onto/into every single, yes every single, GM vehicle built in North America.
gJohn. Excellant . Good spanking. The US ( U.S.) generation. u.s is numer one.
They live in their” OWN LITTLE WORLD.’ They live in side of their heads. The people in their brains. They are driving them “INSANE.” Kenny + tigger can*t even find da 51 st state on da world map. They thinks the world map only has the Good OLD u.s. of a. on it. trump*s map perhaps?? nOOOO!!! Sarcasm??? Yous thinks so. ???
Shipping vehicles by sea is not efficient- for the same reason flatscreens replaced tube tvs so quickly- they take up a ton of space on a ship-