Trump Imposes 25% Tariff on Imported Cars, Exempts US-Made Vehicles from Duties
US President Donald Trump on Wednesday announced a 25% tariff on all imported cars and auto parts, effective from April 2, which he termed “Liberation Day” for the US. The new policy exempts vehicles manufactured in the United States from any tariffs, aiming to boost domestic production. The decision, however, is expected to strain trade relations with key partners like Japan, South Korea, Canada, Mexico, and Germany.
The White House stated that the 25% tariff will apply to imported passenger vehicles, including sedans, SUVs, crossovers, minivans, cargo vans, and light trucks, as well as key auto parts like engines, transmissions, and electrical components. Trump emphasized the policy’s intent, saying, “What we’re going to be doing is a 25 percent tariff on all cars that are not made in the United States. If they’re made in the United States, it is absolutely no tariff.”
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Around half of the cars sold in the US are imported, with nearly half of those imports coming from Mexico and Canada, followed by Japan, South Korea, and Germany. The Center for Automotive Research has warned that such tariffs could increase car prices by thousands of dollars and negatively affect the US job market. The move follows Trump’s earlier tariffs on steel, aluminum, and imports from Canada, Mexico, and China since January.
The Trump administration views tariffs as a tool to raise government revenue, revitalize American industries, and pressure other nations into aligning with US trade terms. Beyond automobiles, Trump reaffirmed plans to impose tariffs on lumber and pharmaceuticals, signaling a broader strategy targeting multiple sectors. The White House noted that the auto tariffs could expand to additional parts if deemed necessary.
The new tariffs, set to take effect on April 2, are likely to face pushback from affected countries, potentially leading to retaliatory measures. The impact on car prices and the US auto industry will be closely monitored, with experts predicting challenges for both consumers and manufacturers. Further updates on trade negotiations and tariff expansions are expected as the situation develops.
