Trump announces imposition of tariffs on all cars imported into US
Donald Trump (photo: Getty Images)
US President Donald Trump has announced that he is imposing a 25% tariff on all vehicles imported into the US. However, there is a condition under which the tariff will not apply, reports NBC News.
According to the American leader, he expects car manufacturers to relocate production to the US and either build new plants or expand existing ones. In such cases, the tariff will not apply.
"If you build your car in the US, there's no tariff," Trump explained.
He also criticized companies that, over the past decades, have opened factories in Canada and Mexico, claiming this was at the expense of American workers. As the US president noted, the tariffs will take effect on April 2 and will be permanent.
Following the announcement, shares of major US automakers dropped in after-hours trading. Specifically, Ford Motor shares fell by 2%, General Motors by 2.3%, and shares of Jeep owner Stellantis dropped by 3%.
NBC notes that the 25% tariffs will almost certainly increase the cost consumers will have to pay when purchasing new vehicles subject to the tariffs.
NBC News also writes that no car operating in the US has components made exclusively in America. Most cars, with 50% or more of their parts sourced from suppliers in the US or Canada, are either produced by Tesla or foreign brands with assembly plants in the US, including Honda, Hyundai, Kia, Nissan, Mazda, Subaru, and Toyota.
Currently, Mexico remains the largest source of car imports to the US. The country accounts for about 14% of all vehicles purchased in the US. Following Mexico are Japan, South Korea, the European Union, and Canada.
In early March, White House press secretary Karoline Levitt stated that Trump plans to temporarily exempt US car manufacturers from tariffs on imports from Canada and Mexico for one month. The decision was made after a meeting with leaders of the "Big Three" automakers.
