Mumbai: Shares of Tata Motors, a major Indian automobile company, fell 6% after U.S. President Donald Trump announced a 25% import duty on foreign cars. Tata Motors’ decision will directly impact Jaguar Land Rover (JLR), which sold 4 lakh vehicles globally in the financial year 2024. Of these, 88,000 (22 per cent) were U.S. sales. JLR builds the bulk of the cars in the U.K., where a new tariff would increase their U.S. prices.
It has also reverberated through the ranks of U.S. car manufacturers. Shares of General Motors fell 3%; shares of Stellantis, the maker of Jeep and Chrysler, dropped 3.6%. At the same time, Canada and the European Union have condemned Trump’s action. Canadian Prime Minister Mark Carney referred to it as a “blatant offence” and pledged to safeguard Canadian business and employees. European Commission President Ursula von der Leyen said the tariff would “distort global trade.”.
With the average new car costing around $49,000 (approx. Rs 42 lakh) in the U.S., experts have said the situation could result in prices soaring by as much as $12,500 (approx. Rs 10 lakh) due to the tariff. American consumers could take the brunt of this. However, the White House says the policy will raise $100 billion (8.3 lakh crore rupees) in revenue a year and support U.S. manufacturing for years by attracting new plants.
Trump has described a “tit-for-tat” response entailing the introduction of similar tariffs on goods from countries like India starting April 2 as well. He says India imposes a tax of more than 100% on U.S. imports and that the U.S. should fight back. Should that happen, it could be a serious blow to Indian exporters since over 17% of India’s foreign trade is with the U.S., with fruits and vegetables being the major exports.
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