Trade policies intended to protect American manufacturing may be backfiring, giving foreign rivals, such as Toyota, a surprising edge.

After the US imposed new 15% tariffs on steel and metals, Toyota’s shares surged nearly 14%, outpacing American automakers who now face far steeper duties. While companies like Ford, GM, and Tesla are dealing with tariffs of up to 55% on key imports like copper, steel, and other materials, Toyota is hit with only a 15% hike—giving it a notable cost advantage.

For US carmakers, especially those focused on electric vehicles, the new 50% copper tariff is a major blow. Copper is essential for EV wiring, motors, and batteries, and the cost of producing each vehicle is expected to rise by hundreds of dollars.

The situation is worsened by the fact that US automakers source most of their copper from countries such as Canada, Mexico, and Chile, all of which are now subject to high tariffs. This is creating significant supply chain pressure and substantially increasing production costs.

Meanwhile, Toyota and other Japanese carmakers are relatively insulated. With fewer and lower tariffs, their cost structures remain more stable—translating into better pricing power and stronger investor confidence.

The contrast is clear in the markets: Toyota’s stock has rallied, while American carmakers are under pressure. Instead of levelling the playing field, the new tariff regime may be tilting it in favour of foreign players.

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