US President Donald Trump has announced a 90-day pause on reciprocal tariffs, putting a dent in the largest single-month forecast change seen by S&P Global Mobility. The US has maintained its universal 10% tariff on all imports since April 3, which includes auto parts and vehicles.
While the situation remains dynamic, S&P Global Mobility has set its assumptions for light-vehicle sales and production forecasts, taking into account the impact of Trump’s auto tariffs in combination with the 10% universal tariff. The company expects a sharp decline in global light vehicle sales by April 2025, with reductions of 2.5 million units for 2026 and 2.0 million units for 2027.
The US is expected to see its sales downgraded by about 700,000 units in 2025, 1.2 million units in 2026, and 930,000 units in 2027 compared to previous expectations. South Korea, Japan, mainland China, Europe, and North America will experience lower volumes of US sales across the next three years.
The company projects a decline in North American light vehicle production by about 1.28 million units in 2025, with an expected range of 13.9-14.3 million units for that year. In 2026, production is forecast to decrease by 4.5% to 7.0%, and in 2027 by 1.0% to 3.5%.
S&P Global Mobility also warns that the tariffs will push US freight recovery further into the future, making 2025 another down year for the North American medium- and heavy-duty commercial vehicle market. The impact of the tariffs is expected to be massive in the near term, with the US and North America feeling the worst of the effect.
As the situation continues to unfold, S&P Global Mobility offers clients unique insights to navigate tariffs and more, allowing them to see opportunities others don’t. With 100+ years of automotive industry expertise, they provide tailored advisory services designed to help businesses navigate the complex landscape of global trade and tariffs.
Source: https://www.spglobal.com/automotive-insights/en/rapid-impact-analysis/auto-tariffs-lead-to-forecast-downgrades