by Joe
2.5-minute read
In a bold move aimed at reshaping the auto industry, President Donald Trump announced a new 25% tariff on foreign-made vehicles Wednesday—a policy expected to impact nearly half of all cars sold in the U.S. The 78-year-old leader framed the measure as a critical step toward reviving American manufacturing, declaring it would spur domestic production and reduce reliance on imports.
Standing in the Oval Office, Trump assured the public that the tariff would incentivize automakers to build more plants on U.S. soil. “We’ll effectively be charging a 25% tariff, but if you build your car here, there’s no tariff at all,” he said.
With over half of U.S. car sales coming from foreign manufacturers—primarily Mexico, Canada, Japan, South Korea, and Germany—the policy could reshape the market. The official explained that vehicles from Canada and Mexico would face tariffs based on their parts composition. For example, a Mexican-made car with 50% U.S. parts would incur a 12.5% duty.
White House staff secretary Will Scharf projected the policy could generate $100 billion annually, though analysts warn it may also drastically slash import volumes. An administration official later clarified that the levy would extend to auto parts, stacking atop existing tariffs of 2.5% on cars and 25% on light trucks.
White House trade adviser Peter Navarro framed the move as a national security imperative, accusing foreign competitors of turning the U.S. into a "low-wage assembly line" for imported components. "Less than 25% of cars sold here are truly American made," Navarro asserted. "That ends today."
The decision follows a U.S. International Trade Commission report warning that such a tariff could slash vehicle imports by nearly 74% while raising domestic prices by 5%. Yet Trump remained confident, claiming automakers with U.S. plants already support the policy, set to take effect April 2. A phased rollout for Canadian and Mexican auto parts is expected after further review.
Trump emphasized the tariffs would remain throughout his term, calling them "permanent, 100%." He projected revenues between 600billionand1 trillion within two years, which he pledged would help reduce national debt and fund tax cuts. The announcement builds on recent trade actions, including tariffs targeting fentanyl-linked imports and stiffened levies on steel and aluminum. Trump also teased future tariffs on lumber, pharmaceuticals, and semiconductors, while hinting at potential leniency for nations adjusting their trade policies.
In a surprising twist, Trump suggested he might ease tariffs on China if it divests from TikTok. “Maybe I’ll give them a little reduction to get it done,” he mused. “Sounds like something I’d do.” Critics warn the tariffs risk reigniting inflation, but Trump pointed to his first-term record of stable prices as proof of their effectiveness.
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