Trump Unveils 25% Auto Tariff, Threatens New Costs for Allies
President Donald Trump signed a proclamation imposing a 25% tariff on auto imports and further duties on the EU and Canada, widening a trade war and prompting threats of retaliation. “What we’re going to do is a 25% tariff on all cars that are not made in the United States,” Trump said at the White House on Wednesday as he pushed a program that seeks to bring more manufacturing jobs to the U.S. Hours later, Trump hinted at further tariffs on the European Union and Canada if they work together “to cause economic harm” to the U.S. The euro briefly pared gains and the Canadian dollar slumped after his late-night post on Truth Social.
Overall, Trump’s escalating trade actions appear set to deepen tensions with major trading partners even before the so-called reciprocal tariffs he promised on April 2. The auto tariffs are set to take effect at 12:01 a.m. Washington time on April 3, initially targeting fully assembled vehicles. On May 3, the scope will be expanded to include major auto parts such as engines, transmissions, powertrain components and electrical systems, with the potential to be expanded further as needed, the proclamation said.
Shares of General Motors Co., Ford Motor Co. and Stellantis NV fell in after-hours trading as Trump spoke. Asian automakers also declined, led by Toyota Motor Corp. Trump called the tariffs “permanent” and said he was not interested in negotiating any exemptions. The tariffs would be in addition to levies already in place, White House Staff Secretary Will Scharf said, and the administration projects they would generate $100 billion in new annual revenue for the U.S.
Source: Bloomberg
