On Wednesday, President Trump announced new tariffs on cars and auto parts. These tariffs will affect car companies in the U.S. and other countries.
Different companies will feel the impact in different ways.
Tesla
Tesla, led by Elon Musk, makes its cars in California and Texas. This means Tesla will not be as affected by the tariffs.
However, Tesla buys many parts from other countries. About 25% of the car parts come from abroad. Tesla is also facing falling sales because of Elon Musk’s political comments. Some people do not want to buy Tesla cars now. Some Canadian provinces have stopped giving incentives for buying Tesla cars.
General Motors
General Motors (G.M.) is the largest car maker in the U.S. It imports many of its popular cars from Mexico. About 40% of G.M.’s sales come from cars made in other countries. This makes G.M. vulnerable to the tariffs.
But G.M. has been making good profits in recent years. This strong position may help G.M. handle the tariffs better than other companies.
Vocabulary List:
- Tariffs /ˈtærɪfs/ (noun): Taxes imposed by a government on imported goods.
- Impact /ˈɪmpækt/ (noun): The strong effect or influence that something has on a situation or person.
- Vulnerable /ˈvʌlnərəbəl/ (adjective): Capable of being easily hurt influenced or harmed.
- Profits /ˈprɒfɪts/ (noun): Financial gains received from business operations after expenses are deducted.
- Incentives /ɪnˈsɛntɪvz/ (noun): Something that motivates or encourages someone to do something.
- Sales /seɪlz/ (noun): The exchange of goods or services for money.
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