Will Trump's tariffs hurt Formula One's new and existing teams? It's complicated

New York Times

11-04-2025

Tariffs issued by U.S. President Donald Trump wreaked havoc on domestic and global economies as countries and industries worldwide grapple with the potential burden. While he suddenly reversed his decision on Wednesday and lowered several of the hefty duties on most countries, a 25 percent tariff on automotive imports remains. However, the trade war between the U.S. and China continues to escalate, as the administration announced increased retaliatory tariffs.
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Businesses worldwide are determining what to do and what will happen with these tariffs in place, and motorsport series such as Formula One are no different.
Haas Automation, which is owned by Gene Haas and is the primary sponsor of the Haas F1 Team, said in a statement earlier this week that it 'is in the process of studying the full impact of tariffs on our operations.'
A spokesperson for the Haas F1 team, however, said ahead of this weekend's Bahrain Grand Prix that there is 'no impact to the team' and insisted it is 'business as usual.'
But questions remain about what these tariffs could mean for F1 and the teams in the long term. The sporting side may largely be insulated from the impact, but could the sport be susceptible to the global financial market?
Similar to how the market is subject to change, it is unclear overall precisely how much the tariffs could impact F1 teams in the short and long run, especially considering it's unknown how long the tariffs will be in place and whether they will increase or decrease.
But here are the big questions the global sport faces as we explain the tariffs and the potential complications.
Tariffs are essentially taxes on imported goods. On March 26, the Trump administration imposed 25 percent tariffs on 'automobiles and certain automobile parts.' The president invoked Section 232 of the Trade Expansion Act of 1962, which allows the president to adjust imports if 'an article is being imported into the United States in such quantities or under such circumstances as to threaten or impair the national security,' according to the statute.
The administration's March announcement stated that the automobile industry in the U.S. 'is vital to national security and has been undermined by excessive imports threatening America's domestic industrial base and supply chains.'
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The president has claimed his tariff policy will correct years of what he sees as unfair treatment by other nations, resulting in factories and jobs coming back to the United States. While some tariffs on most countries will be subject to a 90-day freeze, automobile and auto parts tariffs are not included at this time.
As for what is impacted by the 25 percent tariffs, the list is wide-ranging.
The White House did note that the tariffs can be expanded. The 25 percent tariff on imported vehicles went into effect on Thursday, April 3, and the tariff on the automobile parts imported into the U.S. is expected to be in effect by May 3. The Trump administration previously stated that vehicles and parts that comply with the United States–Mexico–Canada Agreement (USMCA), a trade agreement between the three countries, will be tariff-free.
The American Automotive Policy Council, which represents Ford Motor Company, General Motors and Stellantis, released a statement from President Matt Blunt on March 26 in response to the Trump administration's automotive tariffs.
Blunt said, in part, it was 'critical that tariffs are implemented in a way that avoids raising prices for consumers and that preserves the competitiveness of the integrated North American automotive sector that has been a key success of the President's USMCA agreement.'
It's worth remembering that Liberty Media, an American company, owns F1. But looking deeper into the sport, there are numerous American sponsors, an American team currently competing on the grid (Haas), another squad joining next year that will be headquartered in Indiana (Cadillac), and three races that are stateside — Miami, Austin and Las Vegas.
The supply chain is one area under considerable scrutiny, as it is not publicly known what materials and parts are shipped in and out of the United States when it comes to building F1 cars.
The tariffs could mean Cadillac and Haas, plus Ford's deal with Red Bull regarding engine supply from 2026, may be more vulnerable than other teams that are run only in Europe.
Despite Haas stating that the tariffs won't impact the F1 operation, its parent company, Haas Automation, will take a significant hit.
Haas Automation released a statement on Wednesday detailing the early impact of the tariffs, including 'a dramatic decrease in demand for our machine tools from both domestic and foreign customers.' The company subsequently cut overtime at its Oxnard, California, manufacturing plant, stopped hiring, placed 'new employment requisitions on hold,' and reduced production.
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Haas Automation acknowledged the 'tariffs will have a significant impact' on its business but expressed optimism that the current administration would 'come up with solutions to provide relief for U.S. manufacturers.' The Oxnard plant employs 1,700 people and there are factory outlets across the country.
But there are concerns beyond the U.S market.
'Haas Automation is particularly concerned about the potential reduction of tariffs on machine tools from certain countries, such as Japan, Taiwan, and Korea, without a corresponding reduction in tariff rates for imported raw materials and components into the U.S,' the company said in its statement. Haas Automation and other similar companies use such raw materials to make their own products in the United States.
'Such a scenario would be catastrophic to the $5 billion U.S. machine tool industry, which is a key component of U.S. national security.'
Haas Automation also detailed that machine tools are essential parts of the American manufacturing infrastructure.
It's worth noting that Haas Automation also has a significant Chinese market and the tariff standoff between the U.S. and China continues to escalate. China increased its tariffs on America to 84 percent and Trump responded on April 9 by increasing the tariff on imports from the Asian country to 145 percent.
The natural question arising from this concerns what it means for the Haas F1 operation, its development plan and recruiting process. According to Haas, there's no change to those areas.
To an extent, the team saying it's business as usual seems correct for now, as the F1 operation is an independent company under the Haas umbrella. But F1 teams are generally marketing vehicles for companies, such as Aston Martin or Red Bull. It raises the profiles of businesses and car manufacturers globally, which was the primary reason Gene Haas decided to enter F1 in 2016.
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Earlier this year, Haas F1 team principal Ayao Komatsu revealed this season will be the first that Gene Haas hasn't had 'to put his money in' to help the team's budget, thanks to additional prize money earned last year and new sponsorship cash from Toyota. Haas and the Japanese car manufacturer announced a technical partnership in 2024.
But not all of the car manufacturers in F1 are involved in the U.S. market.
Renault hasn't sold cars stateside since the 1980s, making these tariffs less of a worry when funding its F1 team (Alpine), beyond overall additional financial constraints amid the turbulent global economy.
These two American car manufacturers are entering F1 next season in different capacities.
Ford has a strategic partnership with Red Bull to build engines under the new regulations from 2026 until at least 2030. According to the car manufacturer, it provides 'expertise in areas including battery cell and electric motor technology as well as power unit control software and analytics.'
The engine, though, is being built in Milton Keynes, England, with Red Bull keeping a majority of the development in-house at its Red Bull Powertrains division.
Meanwhile, General Motors is entering the F1 scene with its Cadillac brand becoming the 11th team on the 2026 grid, and the team will operate from three locations — Silverstone, England; Fishers, Indiana; and Charlotte, North Carolina.
Cadillac F1 headquarters will be in Fishers, Indiana, but its European base will be at Silverstone — and that facility is already up and running. Operating within 'Motorsport Valley' in the UK and using a customer Ferrari engine in its early years on the grid could provide Cadillac with some insulation from the tariffs. However, Cadillac has remained firm about being an American motorsports team.
It remains to be seen what the potential impact could be on these operations, if there is any at all. The future health of the U.S. automobile industry could influence matters. Ford and Cadillac have yet to respond to The Athletic's request for comment.
F1 has been here before relatively recently and in similar circumstances.
The current global market slump echoes the decline from the Global Financial Crisis of the late 2000s. Back then, in response to severe ensuing financial constraints, several major car manufacturers pulled out of their team-owning F1 commitments (Honda, BMW, Toyota) or reduced their stake in a squad (Renault).
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As mentioned, F1 team ownership or sponsorship models are huge marketing strategies for car manufacturers. Such initiatives, therefore, come under threat – if not cancelled outright, as 2008-2009 showed – if companies are forced to make major budget cutbacks.
In some markets specific to F1, the automotive industry was already suffering significantly even before tariffs joined the agenda. For instance, Germany, which has one team entry from Mercedes and will get another with Audi joining in 2026. Audi owner Volkswagen only reached a late deal to avert major factory closures and forced layoffs in Germany in late 2024 after a huge drop in profits, via an agreement to cut more than 35,000 jobs over the coming years to 2030.
Luxury car brands involved in F1 are also under significant pressure from the 25 percent tariffs on imported cars coming into the U.S, plus the similar tariff coming on importing car parts. Ferrari, for instance, has committed to absorbing the tariff-related costs for three of its models sold in the U.S. – the Ferrari 296, SF90 and Roma – but warned that to stay on track for its financial targets in 2025, prices for its other cars will go up by 10 percent.
While Ferrari is the only team that has competed in F1 since the world championship began in 1950 and is worth so much that its continued participation is considered generally fixed, these numbers illustrate the problems facing the Italian team and nearly all its rivals right now when margins are threatened.
Plummeting stock prices are also relevant to Liberty Media, which owns F1's commercial rights, and the Formula One Management company that runs the championship. Both are traded primarily on the Nasdaq stock exchange as FWONA and FWONK.
As with so much of this developing tariff story, the full implications can't yet be known.
F1's Europe-centric operations should, in any case, provide a degree of insulation from the specific market impacts of tariffs, given that the teams build their cars at source. The competitors are also in a much stronger financial state than during the Global Financial Crisis.
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Much of this has to do with how F1's cost cap rules have contributed to inflating teams' worth north of $1 billion, for all squads. This limits spending on car design and production to $135 million for all teams bar Haas, which has a lower limit of $120 million as it outsources much of this process to other companies. The rules are an attempt to create competitive parity between the teams.
At the very least, this is a topic that is not going to disappear fast.