Luxury and performance carmakers have been adjusting their strategies in response to the Trump administration’s 25% tariffs on imported vehicles and auto parts. The new trade policy, which came into effect on April 3rd, 2025, has disrupted supply chains and has prompted several automakers who export vehicles to the United States to review inventories and revise pricing in an effort to reduce exposure. The latest to join this pact is Aston Martin. Citing uncertainty caused by tariffs, the British marque will be cutting shipments to the U.S., a market that brought in one-third of its £1.6 billion ($2.13 billion) global revenue last year.
The company reported a 13% decline in its Q1 revenue for 2025. However, despite challenges, Aston Martin is keen to return to profitability and a U.K.-U.S. trade agreement will be vital. Profitability is a key part of CEO Adrian Hallmark’s plan, who said in the latest earnings call that the company is carefully monitoring the tariff situation and is relying on existing dealer stock to meet demand through June. For now, Aston Martin will avoid passing the full burden of these tariffs and instead split it with customers. The brand is also preparing a range of pricing contingencies to manage the potential impact on its lineup, predominantly made up of performance models and the DBX SUV.
Other Luxury Brands That Have Pulled Back Under Tariff Pressures
Fellow-British automaker Jaguar Land Rover has paused U.S.-bound shipments as it re-evaluates its strategy, while most German brands have been hit particularly hard as the U.S. market makes up a significant portion of their exports. While Mercedes-Benz has said that it will absorb tariff costs for its 2025 model-year vehicles, BMW announced that it would absorb tariff costs on Mexican-built models like the 3 Series and M2 until May 1st.
Audi has reportedly begun holding imports at U.S. ports, and staying within the VW Group, sister-brand Porsche has temporarily halted shipments of certain models to the United States while it comes up with a new strategy. Meanwhile, Ferrari has raised prices by as much as 10% on models like the Purosangue SUV, 12Cilindri, and F80.
Fresh Developments In U.S. Trade Policy To Provide Some Relief From Tariffs
Given the increased volatility in the auto segment over the past month, President Donald Trump signed an executive order on April 29, 2025, offering some tariff exemptions and steel/aluminium cost reimbursements for manufacturers that qualify. It also eliminates the overlapping tariffs on both vehicles and parts from Canada and Mexico. Vehicles that comprise a minimum of 85% American-made and USMCA-compliant parts are now exempt, in a bid to create incentives for companies to localize assembly and sourcing strategies.
For foreign luxury automakers with already established manufacturing plants in the U.S., like BMW and Volvo in South Carolina, these brands are better positioned to adapt more quickly. Mercedes-Benz in particular benefits from its Alabama facility, where it builds the bulk of its SUV model lineup. Domestic production, particularly when it comes to more mainstream body types like SUVs and sedans, could be shielded from steep price hikes and help maintain supply amid this time of uncertainty.
For brands without U.S. manufacturing, a potential move to produce some high-volume models locally in the United States should be part of their long-term goals. This is something that Porsche is already considering, and both Audi and Porsche could take advantage of VW’s Chattanooga plant in Tennessee. As supply chains adjust and strategies evolve, you can expect some uncertainty across the market until prices settle. Having said that, manufacturer promotions and dealer incentives may temporarily mitigate the impact on buyers.
Image Source: Aston Martin
