In the statement announcing the new tariffs on cars and auto parts, President Donald Trump invokes Section 232 of the Trade Expansion Act of 1962, which provides the president with the authority to adjust imports coming into the United States “in quantities or under circumstances that threaten to impair national security.” The U.S. car industry – considered critical to the U.S. industrial base – is under so much threat from foreign competition and the pitfalls of global supply chains, that it needs protection in the form of tariffs, the Trump administration argues.
But is it really in such a bad shape? Let’s look at the numbers. According to data published by the Board of Governors of the Federal Reserve System, 10.25 million passenger cars and light trucks were assembled in the United States last year. That number has been relatively stable over the past two decades with the exception of the financial crisis impacting sales and production volume in 2008 and the following years and the Covid-19 shock that resulted in reduced production in 2020 and 2021. Looking further back until 1980, domestic production of light vehicles peaked in 1999 at 12.6 million vehicles – just 23 percent higher than the 2024 output.
Of the 10 million vehicles made in the U.S. last year, 1.5 million were exported, leaving roughly 8.5 million for the domestic market. In addition, the U.S. imported 8 million light vehicles, or roughly half of the 15.9 million passenger cars, SUVs and light trucks sold last year. Since 2008, the share of imports in domestic sales has fluctuated between 41 percent in 2021 and 50 percent in 2010 and 2024. Meanwhile domestic production as a share of domestic sales (not accounting for exports) stood at 65 percent last year, which is exactly the average ratio of domestic production to sales since 2008. Going back to 1980, this value peaked at 79 percent in 1995, but the decline hasn’t been as dramatic as the Trump administration’s argument would suggest.
There has, however, been a meaningful increase in imports of car parts in recent years. According to the International Trade Administration, auto parts imports surged from $90 billion in 2008 to $197 billion last year – an increase of 119 percent. It cannot be denied that even cars “made in America” are mostly half American at best, which is a testament to increasingly global supply chains and the free movement of capital and goods. So what about jobs? Did the partial outsourcing of the automobile value chain destroy millions of American jobs? Not exactly. According to the Bureau of Labor Statistics, the motor vehicle and parts industry supplied roughly one million jobs in February 2025. While that’s down from 1.3 million around the turn of the century, it’s still more than for the most part of the past decade, when the industry was still reeling from the aftermath of the financial crisis.
