President Donald Trump addresses a joint session of Congress at the Capitol in Washington, Tuesday, March 4, 2025. (Win McNamee/Pool Photo via AP)
Credit: AP
Donald Trump has announced 25% tariffs on all cars made outside of the US.
Speaking to reporters in the Oval Office, the US President said he was signing an executive order aiming to grow America's car manufacturing industry.
Addressing Trump, White House Staff Secretary Will Scharf said the administration anticipated the 25% tariff would raise $100 billion in revenue.
Trump has long said that tariffs against auto imports would be a defining policy of his presidency, betting that the costs created by the taxes would cause more production to relocate to the US.
But US and foreign automakers with domestic plants still depend on Canada, Mexico and other nations for parts and finished vehicles, meaning that auto prices could increase and sales could decline as new factories take time to build.
“We are going to be doing automobiles, which you’ve known about for a long time,” Trump said Monday. “We’ll be announcing that fairly soon, over the next few days probably."
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These fresh tariffs come ahead of April 2, or "liberation day", as the president has called it.
It's reported this is the day the administration has planned to impose reciprocal tariffs on all countries that responded to initial US import taxes with tariffs of their own.
Trump has already placed a 20% import tax on all imports from China for its role in the production of fentanyl.
He similarly placed 25% tariffs on Mexico and Canada, with a lower 10% tax on Canadian energy products.
Parts of the Mexico and Canada tariffs have been suspended, including the taxes on autos, after automakers objected and Trump responded by giving them a 30-day reprieve that is set to expire in April.
The president has also imposed 25% tariffs on all steel and aluminum imports, removing the exemptions from his earlier 2018 taxes on the metals.
He also plans tariffs on computer chips, pharmaceutical drugs, lumber and copper.
His taxes risk igniting a broader global trade war with escalating retaliations that could crush global trade, potentially hurting economic growth while raising prices for families and businesses as some of the costs of the taxes get passed along by importers.
When the European Union (EU) retaliated with plans for a 50% tariff on U.S. spirits, Trump responded by planning a 200% tax on alcoholic beverages from the EU.Trump also intends to place a 25% tariff on countries that import oil from Venezuela, even though the United States also imports oil from that nation.
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