Racing Against Tariffs: How Strategic Talent Drives Automotive Resilience

Tariff Shocks Reshape the Automotive Sector

Early in 2025, the Trump administration introduced new tariffs, including a 25% levy on imported cars and parts. The move aimed to encourage domestic manufacturing but quickly unsettled automakers and suppliers across the Atlantic. Industry associations warn that tariffs of this scale could disrupt global supply chains, drive up costs, and slow production. One group of manufacturers noted that the failure of a single supplier can be enough to halt an entire assembly line.

European carmakers such as Stellantis and Volvo are already reporting higher costs and disrupted planning as trade tensions rise. The immediate impact has rippled through pricing, logistics, and investment plans across both sides of the ocean.

Rising Costs and Supply Chain Strains

The new tariffs are raising input prices for metals, components, and finished vehicles from Canada, Mexico, and Europe. Automakers must either absorb the cost or pass it on to consumers. Credit analysts expect profit margins to come under pressure, with some companies already warning of reduced cash flow. Volvo Cars, for instance, ships most U.S. sales from its European factories and has seen profits fall sharply. In response, it has launched a major restructuring of its American operations.

U.S. manufacturers face similar headwinds. Automakers warn that higher materials and parts costs will push vehicle prices up and reduce dealership sales. Some industry letters to the administration predict that a 25% tariff on parts could make cars significantly more expensive for consumers, while also raising maintenance and repair costs.

Global supply chains, still recovering from pandemic-era shocks, are facing new strains. Tariffs on steel, aluminum, and parts are threatening suppliers already working on narrow margins. Both Ford and GM have warned that smaller suppliers may not be able to absorb the impact, risking bankruptcies and production stoppages. Analysts estimate that if tariffs remain in place, North American light vehicle production could fall by as much as 20,000 units per day within a week.

The downstream effects are clear: increased inventory costs, interrupted sourcing, and added complexity in determining which goods qualify for exemptions under trade agreements.

Production Shifts and Global Competitiveness

Automakers are now reassessing their manufacturing strategies. Shifting production to North America might appear a solution, but the process is costly and slow. S&P Global reports that moving capacity to U.S. plants would raise labor expenses, deepen component shortages, and leave facilities in Mexico and Canada underused. Reshoring at scale requires years of investment, not months.

In Europe, the pressure is even greater. The chairman of Stellantis warned that high tariffs, when combined with EU environmental regulations, could threaten the competitiveness of the entire sector. The Association of European Automakers has called for renewed trade dialogue to prevent escalation, but some companies are already adjusting course. Volvo’s leadership is relying more heavily on its Chinese parent Geely to share suppliers and reduce costs. BMW’s CEO has suggested that the EU lower import duties to match the U.S. rate of 2.5% to maintain parity in trade.

Across the board, carmakers are rethinking pricing, launching cost control programs, and reviewing their global footprints. Margins are shrinking, uncertainty is rising, and competition from low-cost Chinese electric vehicle manufacturers continues to intensify.

Executive Search: Strategic Leadership Solutions

Adapting to this new reality requires more than operational adjustments. It calls for strong, experienced leadership. Automotive companies need executives who can redesign supply chains, strengthen operations, manage government relations, and balance financial risk in a volatile trade environment.

At Jordan Sheppard, we specialize in helping clients identify and secure these leaders. Our global experience in the automotive sector allows us to deliver executives who bring both strategic insight and practical execution skills.

Key areas of leadership demand include:

• Supply Chain Management: Leaders who can restructure logistics, diversify suppliers, and improve resilience against tariff exposure.

• Operations and Manufacturing: Experts who can implement cost-saving production shifts, optimize inventories, and maintain output despite uncertainty.

• Government and Regulatory Affairs: Senior professionals who understand international trade policy and can negotiate exemptions or compliance strategies.

• Finance and Risk Management: Executives who can model complex cost scenarios, manage currency and tariff risks, and secure funding for restructuring.

Through our network and deep sector knowledge, we act as more than recruiters. We partner with clients to define leadership profiles aligned with real-time challenges. The result is faster, more targeted placements of executives who can lead change programs from supply chain redesign to government engagement.

Talent competition is intensifying. Skilled professionals are in short supply, and retaining top performers is increasingly difficult. Our firm has a long record of helping clients design attractive leadership opportunities that draw in exceptional talent from around the world.

Conclusion: Navigating Turbulence Together

The tariff shocks of 2025 have introduced a new layer of complexity to the automotive industry. Rising costs, strained supply networks, and shifting trade policies are reshaping the competitive landscape. In such times, effective leadership becomes the single most valuable asset a company can have.

Jordan Sheppard helps automotive firms secure the executives who can navigate this environment and lead with confidence. From supply chain strategy and manufacturing optimization to government affairs and financial management, we support our clients in building leadership teams capable of adapting to disruption and driving long-term success.

As tariffs and trade pressures continue to evolve, partnering with a trusted executive search firm is no longer optional—it is essential for resilience and growth.