Trump imposes 25% tariff on car exports to the U.S.
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U.S. President Donald Trump signed an executive order yesterday, announcing that from April 2nd, new 25% tariffs will apply to imported cars in the U.S. – up from the current 2.5%. Trump also stated that additional tariffs on imported car parts will be introduced in May.
The decision aims to boost domestic production and increase investments in the U.S.; according to POTUS' estimates, car manufacturers will earn between $600 million and $1 trillion over the next two years. In addition, the Trump administration is already working on additional tariffs targeting the timber trade and the pharmaceutical sector.
International reactions were swift: European Commission President von der Leyen expressed regret and stated that the EU will continue seeking a negotiated solution, while protecting European economic interests. However, Trump has threatened even higher tariffs if Canada and the European Union collaborate to harm the U.S. economically.
U.S. automakers are also concerned about the new tariffs, especially regarding the potential impact on consumers. These are the main concerns raised by Ford, General Motors, and Stellantis in a press release from the AAPC, the American automakers' trade association. Furthermore, the increase in tariffs could have an even greater impact on U.S. car manufacturers, as many factories have been relocated to Mexico, which is the largest exporter of vehicles to the U.S. -$78,5 billion import value in 2024 – where labor costs are lower compared to the United States.
Meanwhile, shortly after Trump’s announcement, stocks of major automakers plunged. Japan exports a third of its vehicles (21.3 trillion yen) to the U.S., and the Japanese government has stated that appropriate measures will likely be adopted.
The decision aims to boost domestic production and increase investments in the U.S.; according to POTUS' estimates, car manufacturers will earn between $600 million and $1 trillion over the next two years. In addition, the Trump administration is already working on additional tariffs targeting the timber trade and the pharmaceutical sector.
International reactions were swift: European Commission President von der Leyen expressed regret and stated that the EU will continue seeking a negotiated solution, while protecting European economic interests. However, Trump has threatened even higher tariffs if Canada and the European Union collaborate to harm the U.S. economically.
U.S. automakers are also concerned about the new tariffs, especially regarding the potential impact on consumers. These are the main concerns raised by Ford, General Motors, and Stellantis in a press release from the AAPC, the American automakers' trade association. Furthermore, the increase in tariffs could have an even greater impact on U.S. car manufacturers, as many factories have been relocated to Mexico, which is the largest exporter of vehicles to the U.S. -$78,5 billion import value in 2024 – where labor costs are lower compared to the United States.
Meanwhile, shortly after Trump’s announcement, stocks of major automakers plunged. Japan exports a third of its vehicles (21.3 trillion yen) to the U.S., and the Japanese government has stated that appropriate measures will likely be adopted.