US President Donald Trump recently announced the imposition of 25% customs duties on all cars exported to the United States, to be applied to car manufacturers abroad and auto parts.
The United States imports about half of the vehicles sold in it, in addition to approximately 60% of locally collected vehicle parts, which means that customs duties may raise car prices significantly, at a time when inflation has already increased the cost of cars and trucks on American consumers, according to the New York Times.
On April 2, the US President announced what he called “Liberation Day”, absolutely known as “mutual customs duties”, which caused a widespread shock in the global commercial system and confused financial markets, as high customs duties have been imposed on more than 90 countries around the world.
However, the US President returned on April 9 to announce the reduction in the rates of new fees on the imports of most of the United States trading partners -with the exception of China -to 10% for 90 days, to allow the opportunity to hold trade negotiations, according to CNBC.
However, many customs duties announced by Trump since his return to the White House are still in force, and have not been affected by the temporary freezing period, including customs duties by 25% on all car imports to the United States, according to the BBC.
https://www.youtube.com/watch?v=luuy-hc4N1M
What is the impact of these fees on the car market in the Arab region?
Before answering, we must know that China It dominated the production of global cars in 2023, and constituted approximately a third of the total car produced that year (32.2%).
China produces and exports cars more than any other country in the world, as of December 2024, according to the “Vigioal Capitlist” platform based on the data of the International Organization for Mechan Vehicle Manufacturers.
The country is currently enjoying the ability to produce more than twice the domestic demand for cars, allowing allocating a large part of its production of cars for export.
The Chinese government has invested significantly in increasing the production of local cars, especially the prosperous electric car sector.
The government’s strategic initiatives, such as “Made in China 2025”, gave priority to the manufacture of electric vehicles, which led to significant growth in this field according to the previous source.
The United States comes second with a stake of 11.3% of the global market, and the Tesla Company, owned by Elon Musk, is currently the most valuable auto industry company in the world, with a market value of 811.5 billion dollars, according to the “Compane Market Cap” platform.
The Japanese company Toyota is ranked second with a market value of 228.09 billion dollars, then the Chinese company “BYD” with a value of 146.72 billion dollars, according to the same source.
What is the impact of Trump’s fees on car prices in the Arab region?
Although the customs procedures and duties imposed by the Trump administration – whether on cars or other commodities – are aimed at major economies such as China and the European Union, their impact indirectly extends to the economies of the Middle East and North Africa by increasing import costs, transformations in trade paths and fluctuations in energy markets, according to Atlantic Counts.
On the export level, American customs duties are expected to harm the car markets and some other commodities. For example, Morocco is a major source of cars, and although the European market is its main destination, any global economic slowdown or commercial transformation may indirectly affect car factories and suppliers in the Kingdom, according to the same source.
In Jordan, the ally of the United States, a 20% customs duties were imposed on cars despite the presence of a long -term free trade agreement with Washington, which would directly affect the prices of cars imported from the United States, as many Jordanian merchants import used cars from the American market.
In this context, the representative of the vehicle sector in the Jordan Free Zones Investors Authority, Jihad Abu Nasser, confirmed to Al -Jazeera Net that the decision to impose fees will lead to an increase in car prices in the United States, which will affect traders who depend on importing cars from them.
Abu Nasser added that there is a “proposal under discussion in Jordan that aims to exempt American cars from the customs duties imposed on them, in order to avoid the impact of large American customs duties on Jordanian exports, especially in light of the fees imposed by the Trump administration by 20%, and in the event that this proposal is approved, the door may be opened to increase the import of American cars to the Jordanian market, which may lead to low prices locally.”
For his part, the Jordanian investor, Walid Al -Hayt, told Al -Jazeera Net that “the countries that import cars from the United States will likely witness a significant increase in prices as a result of the new customs duties imposed by the American administration, which amount to 25%, and this will lead to raising the prices of cars imported from America, whether new or used.”
He added, “In the event that agreements are signed between Jordan or other Arab countries on the one hand, and the United States on the other hand to reduce or cancel the customs duties exchanged on goods, this will undoubtedly lead to a decrease in the prices of American cars in the Arab markets as a result of the abolition or reduction of these fees.”
What about Chinese and European imported Arab markets?
Abu Nasser stressed that the impact of Trump fees on the prices of Chinese and European cars in the Arab markets will be small or noticeable.
He added that “the prices of Chinese and European cars will not witness a noticeable increase in the Jordanian or Arab market in the short term, given that these cars are not subject to American customs taxes that will be applied within the United States, yet one of the main factors that may affect prices is the decrease in the value of the dollar, which will raise the cost of importing these cars, as most purchases are carried out in dollars.”
“One of the goals of Trump’s policies is to reduce the value of the dollar against the main currencies in order to enhance the competitiveness of American exports, which makes American products – including cars – is cheaper compared to foreign commodities, such as Chinese and European cars,” Abu Nasser said.
For his part, investor Walid Al -Hayt said, “As for the Arab countries importing Chinese and European cars, each country imposes its own customs tariffs, and these ratios were not affected by the customs duties imposed by the Trump administration.”
“In Jordan, the customs tariff for cars is already high, so I do not expect the prices of Chinese or other cars to witness any change due to these fees,” he added.
Will we see a dumping of Arab markets in Chinese cars?
Many observers expect China to move towards new markets around the world – including the Arab region – to compensate for the lack of exports from cars to the United States, and believe that China may reduce its cars prices to market the huge quantities stored in its factories, which may lead to the dumping of Arab markets with Chinese cars.
But the investor, Walid Al -Hayt, believes that this scenario is unlikely, and says that “China has strong financial tools through which you can deal with such crises, such as reducing the yuan exchange rate, which makes its exports more competitive without the need to reduce the prices of the products themselves.”
“The customs duties imposed by Trump on China and other countries are temporary measures that mainly aim to attract investments to the American market and encourage companies to open factories inside the United States, and these policies are part of Trump’s collection policy to push other countries to invest in America or pay money to them.”
Al -Hayt explained that “there are hidden goals behind these fees, such as reducing the value of the shares of major companies in the financial markets so that the Americans – especially the wealthy of them – can buy them at low prices before the stocks return to the rise after the demise of the customs duties.”
For his part, Abu Nasser stressed that “China has become today the most prominent player in the global auto market, as it produces about a third of cars in the world, and it is expected that China will dominate the market in the near future, especially in the electric car sector.”
Abu Nasser pointed out that “many Arab countries have become more political and economically open to importing Chinese cars, which is evident from the wide spread of them in the Arab markets, and it has become superior in terms of quality and prices on American and European cars.”
He added that “the future of the auto market is heading strongly towards Chinese cars, which is expected to make up more than 50% of the total manufactured cars in the world during the next five years, whether it is imposed or not imposed.”
