US tyre tariffs return: What Trump's 25% duty means for the industry

Trump’s 25% tyre tariff sparks fresh industry concerns

The global tyre industry is bracing for significant disruption following the announcement of a new 25% tariff on imported automotive components, including tyres. Set to take effect from 3 May 2025, the tariff introduced by U.S. President Donald Trump is expected to impact global supply chains, pricing, and production strategies.

The tariffs will apply to all tyres manufactured outside the U.S., making American-made tyres more competitive in the domestic market. Trump argues that the move will strengthen U.S. manufacturing and employment, but tyre companies and analysts warn of far-reaching consequences.

What the new tariff means for the tyre industry

■ Higher tyre prices: Imported tyres will become more expensive in the U.S. market as companies pass tariff costs to consumers and businesses.

■ Production shifts: Domestic manufacturers such as Goodyear are likely to benefit from reduced competition. U.S. factories may see a short-term production boost.

■ Supply chain disruption: Many tyre companies will need to review sourcing strategies. Businesses reliant on imports from Asia, Europe, and Latin America will face higher costs and operational challenges.

■ Global trade tensions: The tariff could strain trade relations. Exporting countries may introduce retaliatory duties, further disrupting tyre trade.

■ Winners and losers: While U.S.-based producers could see demand increase, companies dependent on imported tyres may experience margin pressures and lost market share.

What history tells us: Lessons from Obama’s 2009 Chinese tyre tariff

This is not the first time the U.S. tyre industry has faced tariffs. In 2009, the Obama administration imposed safeguard tariffs of up to 35% on Chinese tyre imports. The short-term goal was to protect domestic tyre manufacturing jobs following a union complaint.

■ Short-term results:

• Imports of Chinese tyres dropped by 28% in 2010.
• U.S. tyre production rose by nearly 14% that year.
• Imports surged from other countries like South Korea, Thailand, and Indonesia, offsetting the reduction in Chinese tyres.

■ Long-term outcomes:

• Employment in the U.S. tyre industry continued to decline, from 49,715 workers in 2007 to 43,197 in 2012, partly due to automation.
• Higher tyre prices for U.S. consumers resulted in net job losses across related retail and service sectors.
• Once the tariffs expired, Chinese tyre imports quickly resumed.

What can we expect from Trump's tariffs?

The experience of the 2009 tariffs suggests that while short-term production gains may occur, structural challenges such as automation, global competition, and supply chain complexity are unlikely to be resolved by tariffs alone.

Analysts predict that Trump's new tariff will:

• Push up tyre prices in the U.S. market.
• Force supply chain shifts and cost increases.
• Lead to possible trade retaliation from major tyre exporters.
• Offer only limited long-term benefits to U.S. manufacturing employment.

The full impact will depend on how tyre manufacturers and trade partners respond, but history indicates that tariffs alone may not deliver the industrial revival promised.

‍

Q&A summary

What is Trump's new tyre tariff?
A 25% tariff on imported automotive components, including tyres, starting 3 May 2025.

Who will it affect?
Tyre manufacturers, importers, distributors, and consumers, both in the U.S. and globally.

Why is it being introduced?
To encourage domestic manufacturing and protect U.S. industry jobs.

How will prices be impacted?
Imported tyre prices will likely rise, and domestic producers may also increase prices due to reduced competition.

What can history tell us?
Similar tariffs imposed in 2009 led to higher prices and supply chain shifts, with limited long-term benefits for U.S. jobs.

‍