US: Trump imposes 25% tariff on all foreign-made cars
US President, Donald Trump has announced plans to slap 25% tariffs on all imported cars, escalating a global trade war just weeks after previous tariffs touched off a market rout and triggered concern about a possible recession.
“We start off with a 2.5% base,” he said, emphasising that these tariffs will be added on top of any existing ones. He made the announcement on Wednesday while speaking from the Oval Office.
“I think our automobile industry will flourish like it hasn’t before,” Trump said.
Earlier this week, he told reporters he would share more details before April 2, the date he previously set to unveil a 25% tariff on “all cars that are not made in the United States.”
That same day, he is set to announce a package of reciprocal tariffs against America’s trading partners, a day he calls “Liberation Day.”
Trump indicated that even vehicles containing American-made parts but assembled outside the US would still be subject to the tariffs.
The 25% tariffs will be applied to imported passenger vehicles, including cars, SUVs, minivans, cargo vans and light trucks, according to a White House fact sheet released after Trump’s Oval Office remarks. The tariffs will also be applied to key imported auto parts, including engines, powertrain parts and electrical components.
The White House noted that 50% of the roughly 16 million cars purchased in the U.S. last year were imports. Of the 8 million assembled in the U.S., the White House estimated those cars only have roughly 50% domestically produced content.
“Therefore, of the 16 million cars bought by Americans, only 25% of the vehicle content can be categorized as Made in America,” the White House argued in its fact sheet.
The tariffs on autos are set to go into effect at 12:01 a.m. on April 3 — one day after Trump’s planned reciprocal tariffs kick in.
The tariffs on auto parts are set to go into effect no later than May 3, according to the White House proclamation.
The White House fact sheet said Trump is imposing the tariffs to protect the U.S. auto industry, “which is vital to national security and has been undermined by excessive imports threatening America’s domestic industrial base and supply chains.”
The U.S. already imposes a 2.5% tariff on passenger car imports and a 25% tariff on imported pickup trucks.