United States President Donald Trump has announced plans to impose 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.
Trump announced on Wednesday, while speaking from the Oval Office that these tariffs would be added to the existing ones. “We start off with a 25% base.
“I think our automobile industry will flourish like it hasn’t before,” he said.
Trump indicated that even vehicles containing American-made parts assembled outside the US would still be subject to the tariffs.
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, which he calls “Liberation Day.”
According to a White House fact sheet released after Trump’s Oval Office remarks, the 25% tariffs will be applied to imported passenger vehicles, including cars, SUVs, minivans, cargo vans, and light trucks.
The tariffs will also apply to key imported auto parts, including engines, powertrains, and electrical components.
The White House noted that 50% of the roughly 16 million cars purchased in the U.S. last year were imported. 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 categorised as Made in America,” the White House argued in its fact sheet.”
The auto tariffs will take effect at 12:01 a.m. on April 3, one day after Trump’s planned reciprocal tariffs kick in.
According to the White House proclamation, the tariffs on auto parts will go into effect on May 3.
The White House fact sheet said Trump was 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.
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