President Donald Trump on Wednesday announced plans to slapped 25% of tariffs on all imported cars, increasing a global commercial war only weeks after previous tariffs fired a defeat from the market and caused concern about a possible recession.
“I think our automotive industry will flourish as before,” Trump said.
25% tariffs will apply to imported passenger vehicles, including cars, SUV, minivans, load vans and light trucks, according to an informative sheet of the White House published after the Trump Oval Office comments. Rates will also apply to imported auto parts, including engines, motor train parts and electrical components.
President Donald Trump talks to the media at the Oval Office of the White House in Washington, on March 26, 2025.
Evelyn Hockstein/Reuters
The White House said that 50% of the approximately 16 million cars bought in the US. Uu last year were imports. Of the 8 million gathered in the US, the White House estimated that these cars only have approximately 50% content produced nationwide.
“Therefore, of the 16 million cars purchased by Americans, only 25% of the vehicle’s content can be classified as performed in the United States,” the White House argued on its fact sheet.
The tariffs on the cars will enter into force at 12:01 am on April 3, one day after Trump’s planned reciprocal tariffs are activated. White House Proclamation.
The White House Informative Sheet said that Trump is imposing tariffs to protect the automotive industry of the United States “, which is vital for national security and has been undermined by excessive imports that threaten the national industrial base and the supply chains of the United States.”
The United States already imposes a 2.5% rate on passenger cars imports and a 25% tariff in imported trucks.
Impact on prices?
Automatic tariffs are ready to attack a sector that uses more than one million American workers and depends on an intricately intertwined supply chain with Mexico and Canada. The tariffs placed the risk of the automotive industry to raise car prices for US consumers, experts previously said to ABC News.
Of the 16 million new cars sold in the US. In 2024, around 8.7 million, or 54%, in the United States, according to Stephanie Brinley, the main automotive analyst that covers North and South America for the Self Intelligence Service in S& P global mobility. Around 7.3 million, or 46%were imported.
Brinley predicted that prices will increase after distributors are sold through the current inventory, in approximately 1 and ½ to 2 months, but customers will not see a direct line charge due to rates at the price of the label because car manufacturers and concessionaires have some margin to maneuver in product and inventory lines.
However, prices are expected to rise in all areas. In addition, used cars prices are ready to increase, tracking the increase in new cars prices and because the offer is already limited. Automobile insurance premiums are also about to become more expensive, experts say.
The average cost of a new imported car is expected to jump $ 6,000 according to COX Automotive. And experts say that the entire automotive market in the United States is expected, even for cars made here, see price increases. Many of the most affordable vehicles sold in the United States come from Mexico.
Canadian Prime Minister: ‘Direct attack’
The move raises decades of free trade between the United States, Mexico and Canada.
Mexico and Canada constitute the two main US commercial partners for finished motor vehicles and car parts, according to a data analysis of the United States International Trade Commission by the Cato Institute, a group of experts.
In 2023, Canada and Mexico represented almost $ 120 billion in imports of motorized vehicles in the United States, which totaled approximately 47% of all imported vehicles that year. Canada and Mexico constituted almost the same part of the imports of auto parts that year, showed the analysis of the Cato Institute.
When it comes to auto parts covered by the United States-Mexico-Canada Free Trade Agreement (USMCA), importers will have the opportunity to “certify” the content of the United States, according to the White House factor sheet.
The 25% rate will only apply to the value of the non -American content, and only after the Department of Commerce and Customs and the US border protection. UU. They ensure a process to apply those rates, according to the information sheet.
During a press conference held at the Ambassador bridge, the new Canadian Prime Minister Mark Carney described the measure in “a direct attack on our workers” and said that he would convene a meeting of his cabinet on the relations of the United States to discuss commercial options.
The Canadian Chamber of Commerce said in a statement: “The consequences of the current escalation in this destructive tariff war will not be contained for Canada, no matter how much the United States administration wants Here.
More rates ahead
Trump announced tariffs earlier this month about a large part of the imports of US cars when he slapped the 25% tariffs in Mexico and Canada, but the president shortly after issued a delay of tariffs related to the car associated with that policy.
The White House Secretary, Karoline Leavitt, foreseen fresh cars rates in comments on Wednesday afternoon, sending us lower actions.
The industrial average Dow Jones closed 130 points, or 0.3%, while the S& P 500 fell 1.1%. Technological heavy nasdaq decreased by 2%.
The actions of American car manufacturers also fell. Tesla, the electric car manufacturer led by Advisor Trump Elon Musk, closed 5.5%. General Motors’ shares fell 3%.
The White House Secretary, Karoline Leavitt, speaks during the daily information session in the Brady Brady Room of the White House in Washington, on March 26, 2025.
Carlos Barria/Reuters
The announcement of car rates comes days before Trump issues a new round of duties on April 2. Trump has repeatedly referred to that date as “day of liberation”, saying that a wide list of reciprocal tariffs referred to US business relations.
Speaking at the White House on Monday, Trump softened his position, saying that reciprocal tariffs may not reach the rate that countries aimed at US assets.
“I can give many countries in countries,” Trump told journalists in the Oval office. “I am ashamed to charge them what they have accused us.”
South Korea, Japan, Mexico and Canada do not impose tariffs on American manufacturing vehicles.
Automatic tariffs follow a large number of duties taxed earlier this month. Trump slapped tariffs to China in early March, increasing taxes on the assets of that country to 20%. Days later, Trump imposed radical tariffs in all imports of aluminum and steel.
The movements caused retaliation rates of China, the European Union and Canada, triggered a commercial war that started the stock market and caused Wall Street warnings of a possible recession.
Economists expect tariffs widely increase prices for consumers, since importers generally transmit a part of the tax burden on buyers.
Speaking at a press conference in Washington, DC, last Wednesday, the president of the Fed, Jerome Powell, criticized tariffs for a “good part” of recent inflation.
