Donald Trump, president of the United States, has announced a 25% tariff on imported cars and car parts as his most recent victory in a growing trade war that has heightened tensions with allies and partners.
Trump claimed at the White House on Wednesday that the tariffs would “take back” money from foreign nations that had been “taking our jobs” and “taking our wealth”
They have alienated both our nation, friend and foe. And, to be honest, friend can often outweigh foe, according to Trump in the Oval Office.
It’s very modest, I thought.
Trump, who has pledged to revive US manufacturing, said the tariffs would “strate growth like you haven’t seen before.” He called the action “exciting.”
The US auto industry, which the White House claimed had been “undermined by excessive imports threatening America’s domestic industrial base and supply chains,” would “protect and strengthen” the country’s economy, according to a fact sheet from the White House.
The White House claimed that while US production has stagnated, the foreign auto industries have grown thanks to unfair subsidies and aggressive industrial policies.
According to the White House, importers who import goods under the United States-Mexico-Canada Agreement will be able to certify which parts of their goods are US-made so that they only pay the tariff on “non-US content.”
Key trading partners, including the European Union, Canada, and Japan, expressed their disapproval of Trump’s statement.
Ursula von der Leyen, president of the European Commission, claimed that the tariffs would “wore for consumers” and “bad for businesses.”
In a post on X, von der Leyen stated that the EU would continue to search for negotiated solutions while protecting its economic interests.
The action was described by Canadian Prime Minister Mark Carney as a “direct attack” on Canadian workers.
“We will protect our workers,” the statement read. We’ll protect our businesses. He declared, “We will defend our country, and we will defend it together.”
Shigeru Ishiba, the country’s prime minister, stated that his government would take “appropriate measures” in response to the tariffs.
In a statement to parliament, Ishiba said, “Natural, we will consider all options.” Bottom line: We must take into account what will best serve Japan’s national interests.
Trump’s decision is likely to have a significant impact on the global auto industry, particularly the North American market, where automakers from the US, Mexico, and Canada have developed highly integrated supply chains over the course of decades of tariff-free trade.
If implemented as planned, the tariffs would “aura-like headwind” for the industry, according to Daniel Ives, head of technology research at Los Angeles-based Wedbush Securities.
Although this initial 25% tariff on cars from outside the US is almost a head scratching number for the US consumer, Ives told Al Jazeera, “We continue to believe this is some sort of negotiation and these tariffs could change by the week.”
Investors will be irritated by this announcement, which “we anticipate learning more over the next week,” because the 25 percent figure for the tariff announcement is difficult to digest.
Ford, General Motors, and Stellantis, the American Automotive Policy Council, which represents US carmakers, stated that it would work with the administration to develop “durable policies” to benefit Americans.
According to AAPC President Matt Blunt, “in particular, it is crucial that tariffs are implemented in a way that avoids raising prices for consumers and preserves the competitiveness of the integrated North American automotive sector, which has been a key success of the President’s USMCA agreement.”
According to the US Department of Commerce, passenger cars costing $ 214 billion in 2024 were imported by the US.
Many of Washington’s most entrusted partners and allies, including Mexico, Canada, South Korea, Japan, and Germany, are among the top auto exporters to the US.
Following earlier declines in US auto stocks prior to Trump’s announcement, the shares of the Japanese and South Korean carmakers sharply decreased on Thursday.
As of 18:00 GMT, Toyota, Honda, and Nissan in Japan had declined by 1.86 percent and 3.35 percent, while Kia in South Korea had fallen by 2.27 percent.
The tariffs are also likely to cause US consumers, who make about half of their purchases abroad, to pay higher car prices.
In response to Trump’s announcement, Autos Drive America’s president and CEO, Jennifer Safavian, said in a statement that “the tariffs imposed today will make it more expensive to produce and sell cars in the United States.”
Trump’s most recent tariff announcement comes less than a week before his scheduled release of additional “reciprocal” tariffs targeting nations deemed to be stealing US trade benefits.
Trump made the alleged sluggishness of the upcoming tariffs on Wednesday, claiming that they would be “very lenient” and that people would be “surprised” by the measures.
