President Trump is expected to impose a 25% tariff on vehicle imports this week.
President Donald Trump has stated he is unconcerned if automakers increase prices due to the anticipated implementation of new tariffs this week.
Trump announced last week that the new auto tariffs would take effect on April 3, with the US set to collect an additional 25% duty on imported cars and auto parts from Mexico, Canada, South Korea, Japan, and Germany, potentially impacting hundreds of billions of dollars’ worth of goods.
While Trump suggested the import tax could generate $600 billion to $1 trillion in revenue over two years, major EU economies and Canada have threatened retaliatory measures.
Despite expert warnings that car prices will likely rise after the tariffs are implemented, Trump told NBC on Saturday that he was unconcerned, stating that increased prices on foreign cars would lead consumers to purchase American cars.
Trump declared last week that the new tariffs would mark “the beginning of Liberation Day in America.”
“We’re going to take back just some of the money that has been taken from us,” the US president stated.
According to an anonymous White House official who spoke to Politico on Wednesday, the 25% tariff will also extend to auto parts, impacting an additional $192 billion in imports from key suppliers like Mexico, Canada, China, Germany, and Japan. Commerce Department data indicates that the US imported $214 billion worth of passenger cars in 2024, with the majority originating from these same five countries.
Currently, Mexico, Canada, and South Korea benefit from duty-free access to the US auto market under trade agreements renegotiated by Trump during his first term. According to the source, cars imported from Canada and Mexico will be taxed based on the proportion of their content that is not of US origin. For instance, a vehicle manufactured in Mexico with 50% American parts and 50% foreign parts would face a reduced tariff of 12.5%.
The tariffs have drawn criticism from foreign leaders and automakers. Japanese Prime Minister Shigeru Ishiba stated his government was considering all possible responses, while the German Association of the Automotive Industry described the move as “a disastrous signal for free, rules-based trade.”
Canadian Prime Minister Mark Carney denounced the tariffs as a “direct attack” on Canadian workers and threatened retaliation.
This development occurs as Washington continues to accuse the EU of unfair trade practices, citing high tariffs on American goods and restrictive regulations that put US companies at a disadvantage.
“`