Trump Announces 25% Tariffs on All Foreign-Built Vehicles
US President Donald Trump announced steep tariffs on auto imports and parts Wednesday, in a move set to fuel tensions with trading partners ahead of further promised levies next week.
"What we're going to be doing is a 25-percent tariff on all cars that are not made in the United States," he said as he signed the order in the Oval Office.
- Also: All the Vehicles Built in Canada and Mexico That Are Sold in the U.S.
- Also: Canadian Auto Industry Responds to Trump’s Tariffs, Sends Warnings
The move takes effect at 12:01am eastern time on April 3 and impacts foreign-made cars and light trucks. Key automobile parts will also be hit within the month.
Peter Navarro, Trump's senior counselor for trade and manufacturing, later in a briefing blasted "foreign trade cheaters" who he said turned America's once-bustling manufacturing sector into a "lower wage assembly operation for foreign parts."
"That threatens our national security because it's eroded our defense and manufacturing industrial base," he said.
Navarro took aim at Germany and Japan for reserving the construction of higher-value parts to their countries.
Since returning to the presidency in January, Trump has imposed fresh tariffs on imports from major US trading partners Canada, Mexico and China -- alongside a 25-percent duty on steel and aluminum. The latest levies will be in addition to those already in place for products.
But the White House added that vehicles entering under the US-Mexico-Canada Agreement (USMCA) can qualify for a lower rate depending on their American content.
Similarly, USMCA-compliant auto parts will remain tariff-free as officials establish a process to target their non-US content.
"Devastating Impact"
Uncertainty over Trump's trade plans and worries they could trigger a downturn have roiled financial markets, with consumer confidence also falling in recent months amid fears of the tariffs' effects.
Wall Street slumped ahead of Trump's announcement, with shares in General Motors down 3.1 percent although Ford eked out a 0.1 percent gain.
The Trump administration has referred to levies as a way to raise government revenue, revitalize American industry and press countries on US priorities. But targeting imported cars could strain ties with countries like Japan, South Korea, Canada, Mexico and Germany -- which are close US partners.
"Imposing 25-percent tariffs on imported cars will have a devastating impact on many of our close trading partners," said said Wendy Cutler, vice president at the Asia Society Policy Institute and a former US trade negotiator.
She added that Washington has free trade agreements with some affected parties, "calling into question the value of US commitments" under a trade deal.
About 50 percent of cars sold in the United States are manufactured within the country. Among imports, about half come from Mexico and Canada, with Japan, South Korea and Germany, also major suppliers. And of the US-made cars, more than half were assembled from foreign parts, said a White House official.
Canadian Prime Minister Mark Carney criticized Trump's automobile import tariffs as a "direct attack" on his country's workers.
The Center for Automotive Research has previously estimated that US tariffs –- including those on metals and imported autos –- could increase the price of a car by thousands of dollars and weigh on the jobs market.
