Trump Forced To Cut Auto Tariffs As China Leads In Software-Driven Vehicles | India To Benefit?

The Trump administration is being forced to reconsider its steep 25% auto tariffs, as China rapidly advances in the development of software-driven vehicles (SDVs). These next-generation vehicles, packed with cutting-edge technology, are far outpacing American offerings — exposing a growing gap in automotive innovation. According to Dharmesh Kant, Head of Equity Research at Chola Securities, this policy move is less about concession and more about survival. The tariffs were initially intended to buy time for the U.S. auto industry to catch up, but with Chinese SDVs setting new benchmarks, that window is closing fast. The U.S. continues to rely heavily on imports for auto components, with its ancillary sector lagging significantly. This development spells opportunity for countries like India, which could benefit from the increased demand for cost-effective auto parts. A recovery in the auto sector could be on the horizon — and this time, India might be better positioned to capitalise.