President Donald Trump has announced new 25% tariffs on cars imported from overseas. The tariffs will take effect next week, starting on April 2. “We’re going to be doing a 25% tariff for all cars that are not made in the United States,” Trump said from the Oval Office.
“We start off with a 2.5% base, which is what we’re at, and go to 25%.”
The announcement was met with criticism from global leaders. Canadian Prime Minister Mark Carney called the tariffs a “direct attack” on Canadian workers and companies. “We will defend our workers, we will defend our companies, we will defend our country, and we will defend it together,” Carney said.
European Commission President Ursula von der Leyen said the move was “bad for businesses, worse for consumers.” Japan’s Prime Minister Shigeru Ishiba said his government was considering “appropriate measures” in response. South Korea’s auto sector also expressed concerns. Industry Minister Ahn Duk-geun said the government was planning an emergency response, noting the significant difficulties the tariffs would impose.
Trump’s new 25% auto tariffs
Despite the criticism, Trump suggested the tariffs would spur economic growth, calling the move “very exciting.” However, the decision has worried investors, leading to a sharp drop in automaker shares, including Hyundai, Toyota, Nissan, and Honda. The tariffs are expected to hit Japan’s auto industry particularly hard.
The sector is a key component of Japan’s economy, accounting for about a tenth of the workforce and a significant portion of the country’s exports to the US. Tesla CEO Elon Musk indicated that although Tesla might fare relatively better, the impact on the company would still be significant. Industry groups have also expressed sharp criticism.
Candace Laing, president and CEO of the Canadian Chamber of Commerce, warned that the tariffs would put jobs and plants at risk. “This tax hike puts plants and workers at risk for generations, if not forever,” she said. A study by Anderson Economic Group estimated that blanket tariffs on Canada and Mexico could increase US car prices by as much as $12,000.
As the tariffs approach their implementation date, global markets and political relations remain tense amid the uncertainty of their broad economic impact.
