President Donald Trump announced a 25% tariff on all imported cars and light trucks, effective April 3, as part of his ongoing trade strategy to reduce the U.S. trade deficit and boost domestic manufacturing. The tariffs, which apply to vehicles not manufactured in the United States, are expected to increase auto prices and impact production.
At an Oval Office event, Trump stressed that the tariffs are needed to strengthen U.S. industry, saying, “We’re going to put a 25% tariff on all cars that are not manufactured in the United States.” The new measures were based on a 2019 national security investigation into auto imports that found they jeopardized U.S. security.
The global response has been swift. European Commission President Ursula von der Leyen called the decision “bad for business, bad for consumers,” and Canadian Prime Minister Mark Carney called the tariffs a “direct attack” on Canadian workers. UAW President Sean Fine praised the decision, highlighting its potential benefits for American auto workers.
Shares in U.S. automakers saw sharp declines, and stock futures pointed to a lower opening for the U.S. market. Analysts warn that the tariffs could lead to higher vehicle prices, lower sales, and job losses in the auto sector, especially since U.S. manufacturers rely heavily on imported parts.
In addition, the tariffs include temporary exemptions for USMCA-compliant auto parts and other imports until May 3, while officials work out implementation details. Trump is also set to announce retaliatory tariffs on April 2 targeting nations that contribute to the U.S. trade deficit.
The economic impact could be significant, as U.S. auto imports account for nearly a full percentage point of gross domestic product. The move is part of Trump’s broader strategy to use tariffs as leverage in international trade disputes, with more announcements expected in the coming weeks.
