Trump intends to set a 25% tariff on foreign cars starting April 2
U.S. President Donald Trump revealed on Wednesday his intention to implement 25-percent tariffs on all imported automobiles, with the new measures scheduled to begin on April 2.
TroibNews 
U.S. President Donald Trump announced on Wednesday his intention to impose a 25-percent tariff on all imported automobiles, with implementation scheduled to begin on April 2.
"What we're going to be doing is a 25 percent tariff for all cars that are not made in the United States," Trump stated during a briefing in the White House Oval Office. "We start off with a 2.5-percent base, which is what we're at, and go to 25 percent."
"We're signing today. It goes into effect April 2. We start collecting on April 3," Trump added.
The president argued that these tariffs would incentivize production to move to the U.S., create new revenue for the government, and assist in reducing the national debt.
However, economists caution that these tariffs may lead to increased car prices and negatively impact consumers who are already dealing with high prices.
Mexico's Monex Financial Group warned Wednesday that the tariffs could raise production costs for both Mexico and Canada, adding further stress to an already troubled global auto industry.
In a sector analysis, Monex indicated that recent U.S. tariffs on steel and aluminum, imposed on March 12, are already affecting trade flows and supply chains.
In 2023, Mexico and Canada accounted for nearly 40 percent of U.S. steel imports and provided around 29 percent of America's imported vehicles, according to Monex.
The proposed 25-percent auto tariff could significantly impact vehicle pricing and availability. For Mexico, the tariffs could affect exports amounting to 4.7 percent of its total trade and over 1.5 percent of its GDP, as per the report.
Industry estimates suggest that this move could increase the average cost of a car in the United States by as much as $3,000, potentially leading to reduced sales in 2025.
Only vehicles that meet the 75-percent regional content requirement under the USMCA trade agreement would be exempt from these tariffs.
The EU has also reacted, with European Commission President Ursula von der Leyen stating that tariffs "are bad for businesses, worse for consumers" in both the U.S. and the EU.
"The automotive industry is a driver of innovation, competitiveness and high-quality jobs, with deeply integrated supply chains on both sides of the Atlantic," von der Leyen noted in a statement.
She emphasized that the EU would evaluate this announcement along with other measures the U.S. is considering in the near future, and reassured that the bloc would continue to seek negotiated solutions while safeguarding its economic interests.
In Canada, Prime Minister Mark Carney indicated that his government would explore retaliatory options against U.S. auto tariffs, viewing them as "a direct attack" on Canadian workers regardless of how they are implemented, according to local media.
"We have anticipated this possibility," he stated. "We will take the steps that are in the interests of Canadian workers, of Canada. We're going to stand up for Canada. We're going to be united."
Carney previously announced a "strategic response fund" of 2 billion Canadian dollars aimed at bolstering the Canadian auto industry.
He explained that these funds would enhance the sector's competitiveness, assist workers in gaining new skills, and create "a fortified Canadian supply chain."
Carney pointed out that auto parts often cross the border multiple times. The cumulative effect of tariffs and counter-tariffs would escalate costs significantly.
He termed this situation a "huge vulnerability" and pledged to establish an "all-in-Canada" manufacturing network to produce more car parts domestically, thereby reducing the frequency of border crossings during production.
"In the new world, that will be an advantage," he remarked. "That will help insulate us from President Trump's trade threats and it will grow the economy."
If he is elected on April 28, Carney indicated that his government would prioritize the procurement of Canadian-built vehicles.
The UK automotive industry also expressed disappointment regarding Trump's new tariffs.
Mike Hawes, CEO of the Society of Motor Manufacturers and Traders, remarked that while the announcement "is not surprising but, nevertheless, disappointing," it raises concerns about potential tariffs on UK-made vehicles.
He called for both the U.S. and UK sides to "come together immediately and strike a deal that works for all."
"Rather than imposing additional tariffs, we should explore ways in which opportunities for both British and American manufacturers can be created as part of a mutually beneficial relationship," he said.
According to the SMMT, the United States is the second-largest market for British carmakers.
In Japan, Prime Minister Shigeru Ishiba stated on Thursday that Japan would consider an appropriate response to the U.S. tariffs, asserting that all options are available.
"We are strongly urging the U.S. not to apply the 25-percent tariff to Japan," Ishiba remarked.
He highlighted Japan's contributions to the U.S. economy through investments and job creation, questioning the fairness of a blanket tariff increase applied to all countries.
Navid Kalantari for TROIB News
"What we're going to be doing is a 25 percent tariff for all cars that are not made in the United States," Trump stated during a briefing in the White House Oval Office. "We start off with a 2.5-percent base, which is what we're at, and go to 25 percent."
"We're signing today. It goes into effect April 2. We start collecting on April 3," Trump added.
The president argued that these tariffs would incentivize production to move to the U.S., create new revenue for the government, and assist in reducing the national debt.
However, economists caution that these tariffs may lead to increased car prices and negatively impact consumers who are already dealing with high prices.
Mexico's Monex Financial Group warned Wednesday that the tariffs could raise production costs for both Mexico and Canada, adding further stress to an already troubled global auto industry.
In a sector analysis, Monex indicated that recent U.S. tariffs on steel and aluminum, imposed on March 12, are already affecting trade flows and supply chains.
In 2023, Mexico and Canada accounted for nearly 40 percent of U.S. steel imports and provided around 29 percent of America's imported vehicles, according to Monex.
The proposed 25-percent auto tariff could significantly impact vehicle pricing and availability. For Mexico, the tariffs could affect exports amounting to 4.7 percent of its total trade and over 1.5 percent of its GDP, as per the report.
Industry estimates suggest that this move could increase the average cost of a car in the United States by as much as $3,000, potentially leading to reduced sales in 2025.
Only vehicles that meet the 75-percent regional content requirement under the USMCA trade agreement would be exempt from these tariffs.
The EU has also reacted, with European Commission President Ursula von der Leyen stating that tariffs "are bad for businesses, worse for consumers" in both the U.S. and the EU.
"The automotive industry is a driver of innovation, competitiveness and high-quality jobs, with deeply integrated supply chains on both sides of the Atlantic," von der Leyen noted in a statement.
She emphasized that the EU would evaluate this announcement along with other measures the U.S. is considering in the near future, and reassured that the bloc would continue to seek negotiated solutions while safeguarding its economic interests.
In Canada, Prime Minister Mark Carney indicated that his government would explore retaliatory options against U.S. auto tariffs, viewing them as "a direct attack" on Canadian workers regardless of how they are implemented, according to local media.
"We have anticipated this possibility," he stated. "We will take the steps that are in the interests of Canadian workers, of Canada. We're going to stand up for Canada. We're going to be united."
Carney previously announced a "strategic response fund" of 2 billion Canadian dollars aimed at bolstering the Canadian auto industry.
He explained that these funds would enhance the sector's competitiveness, assist workers in gaining new skills, and create "a fortified Canadian supply chain."
Carney pointed out that auto parts often cross the border multiple times. The cumulative effect of tariffs and counter-tariffs would escalate costs significantly.
He termed this situation a "huge vulnerability" and pledged to establish an "all-in-Canada" manufacturing network to produce more car parts domestically, thereby reducing the frequency of border crossings during production.
"In the new world, that will be an advantage," he remarked. "That will help insulate us from President Trump's trade threats and it will grow the economy."
If he is elected on April 28, Carney indicated that his government would prioritize the procurement of Canadian-built vehicles.
The UK automotive industry also expressed disappointment regarding Trump's new tariffs.
Mike Hawes, CEO of the Society of Motor Manufacturers and Traders, remarked that while the announcement "is not surprising but, nevertheless, disappointing," it raises concerns about potential tariffs on UK-made vehicles.
He called for both the U.S. and UK sides to "come together immediately and strike a deal that works for all."
"Rather than imposing additional tariffs, we should explore ways in which opportunities for both British and American manufacturers can be created as part of a mutually beneficial relationship," he said.
According to the SMMT, the United States is the second-largest market for British carmakers.
In Japan, Prime Minister Shigeru Ishiba stated on Thursday that Japan would consider an appropriate response to the U.S. tariffs, asserting that all options are available.
"We are strongly urging the U.S. not to apply the 25-percent tariff to Japan," Ishiba remarked.
He highlighted Japan's contributions to the U.S. economy through investments and job creation, questioning the fairness of a blanket tariff increase applied to all countries.
Navid Kalantari for TROIB News
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