President Donald Trump plans to impose a 25% tariff on automotive imports to the United States.
Trump announced the new tariff plan from the Oval Office on Wednesday, touting the businesses and jobs that would be “coming back to the United States.” The tariff will kick in on April 3, a day after the president’s plan for reciprocal tariffs is expected to go into effect, according to The Wall Street Journal.
“What we’re going to be doing is a 25% tariff on all cars that are not made in the United States. If they are made in the United States, there is absolutely no tariff,” Trump said. “Basically, as you know and as you’ve been seeing – not reporting as accurately as it should be reported cause it’s a massive story – businesses coming back to the United States so that they don’t have to pay tariffs.”
The tariffs will affect automotive parts as well as finished vehicles, an administrative official told WSJ. Auto parts included under the U.S.-Mexico-Canada trade agreement will remain duty-free until the Commerce Department finalizes a plan to account for each part’s foreign components.
About 45% of the vehicles sold in the United States annually are sourced from foreign countries, with that percentage varying widely by brand. Carmakers such as Volkswagen, BMW, and Toyota are expected to be hit much harder by the tariffs than companies such as Tesla, which makes all of its U.S.-sold vehicles in the United States, or Ford, which manufactures about 80% of its U.S. vehicles in the country, according to Axios.
The South Korean-based carmaker Hyundai announced on Monday that it planned to invest $20 billion in building its manufacturing capacity in the United States.
In an early morning Truth Social post on Thursday, the president threatened further “large scale tariffs” if Canada and the European Union coordinated against the U.S. tariff structure.
“If the European Union works with Canada in order to do economic harm to the USA, large scale Tariffs, far larger than currently planned, will be placed on them both in order to protect the best friend that each of those two countries has ever had!” Trump posted.
The White House touted the new tariff plan in a fact sheet that said the additional duties would protect the U.S. industrial base and strengthen American manufacturing.
“These new tariffs aim to ensure the U.S. can sustain its domestic industrial base and meet national security needs,” the fact sheet says. “Studies have repeatedly shown that tariffs can be an effective tool for reducing or eliminating threats to impair U.S. national security and achieving economic and strategic objectives.”
