President of the United States, Donald Trump, announced a new 25 percent tariff on imported cars and car parts, as part of an expanding trade conflict that has heightened tensions with both allies and trading partners. In a speech at the White House on Wednesday, Trump stated that these tariffs would “take back” money from foreign countries that have been “taking our jobs” and “taking our wealth”. He described the action as “very modest” and predicted it would “spur growth like you haven’t seen before”.
According to a White House statement, these tariffs are aimed to “protect and strengthen” the US auto industry, claiming it has been weakened by excessive imports that threaten the country’s domestic industrial base and supply chains. It accused foreign auto industries of benefiting from unfair subsidies and aggressive industrial policies, resulting in stagnation of US production.
Importers bringing in vehicles and parts under the United States-Mexico-Canada Agreement (USMCA) would have the opportunity to certify the US-made portion of their products to pay the tariff only on “non-US content”. This move was met with swift criticism and concern from key trading partners including the European Union, Canada, and Japan. European Commission President Ursula von der Leyen called the tariffs “bad for businesses” and “worse for consumers”, while Canadian Prime Minister Mark Carney described it as a “direct attack” on Canadian workers. Japanese Prime Minister Shigeru Ishiba stated his government would consider “appropriate measures” in response.
This decision is expected to significantly impact the global auto industry, especially in the North American market where automakers in the US, Mexico, and Canada have developed integrated supply chains over decades of tariff-free trade. Organizations representing US carmakers, like Ford, General Motors, and Stellantis, expressed a commitment to increasing US production and working with the administration for “durable policies” benefiting Americans.
However, this move is also expected to raise car prices for US consumers, with about half of their purchases coming from abroad. Critiques argue this would make cars more expensive, provide fewer options for consumers, and potentially reduce manufacturing jobs in the US.
Trump’s latest tariffs announcement comes just before he intends to introduce further “reciprocal” tariffs on countries seen as takers on trade, which he says will be “very lenient”, likely less than the tariffs imposed on the US for decades.
Source: https://www.aljazeera.com/economy/2025/3/27/trump-announces-25-percent-tariffs-on-cars-ramping-up-trade-war?traffic_source=rss
