America’s trillion-dollar auto sector may be past its prime. That’s according to New York University Stern School of Business professor and media entrepreneur Scott Galloway, who claimed in a recent YouTube video that 2025 marks “the beginning of the end of the U.S. automobile industry.”
Galloway argues that U.S. automakers are struggling to compete with rising Chinese manufacturers and that President Donald Trump’s ongoing trade war and “tariff nonsense” are having a counterproductive effect, further undermining the industry’s global competitiveness.
He is not alone in sounding the alarm. A growing number of experts — including some U.S. auto executives — have raised concerns about the Trump administration’s unpredictable trade policies and their long-term impact on the sector.
Although the Trump administration’s tariff policy remains fluid, as of August it appears to favor some foreign automakers over domestic ones.
For example, Japan currently faces a flat 15% tariff on all exports to the U.S., including vehicles from its globally dominant brands. Meanwhile, most other countries face a 25% tariff on auto imports. As a result, an American carmaker that manufactures domestically but imports car parts from Mexico or Canada may incur higher production costs than Japanese rivals.
According to the American Automotive Policy Council — a group representing G.M., Ford, and Stellantis — this creates a significant advantage for brands like Toyota or Honda at the expense of U.S.-based manufacturers.
“We just struck a deal with Japan that made it easier for Americans to buy, quite frankly, their superior cars,” Galloway explains in the recent YouTube video.
The global auto supply chain is so complex that even the most “American” vehicles rely on imported components. Tesla’s Model 3 Long Range, for example, contains “40% Chinese content,” according to Frank DuBois, associate professor at American University’s Kogod School of Business.
As domestic automakers struggle, emerging challengers are rapidly gaining global market share in the industry’s fastest-growing segment: electric vehicles (EVs).
