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The US will impose tariffs of 25 per cent on imports of foreign-made autos, Donald Trump said on Wednesday, as he announced a significant escalation in his trade war with America’s allies.
The tariffs will go into effect on April 2, the US president’s self-imposed deadline for unveiling numerous reciprocal tariffs against US trading partners.
“This is the beginning of Liberation Day in America,” Trump said in the Oval Office on Wednesday evening. “If you build your car in the United States there will be no tariff,” he added.
Asked if there was anything carmakers could do to have the tariffs removed, Trump replied: “This is permanent, 100 per cent.”
The president offered a reprieve to the auto industry earlier this month when he temporarily exempted from new tariffs all goods that complied with the terms of the US’s 2020 trade deal with Canada and Mexico.
Speaking on Wednesday, Trump did not outline any such exemptions from the auto tariffs. “For the most part, I think it’s going to lead cars to be made in one location,” he said.
Carmakers have lobbied heavily against the tariffs, arguing they would upend their supply chains and increase the cost of cars for American motorists.
General Motors shares slid 4 per cent in after-hours trading on Wednesday, while US-listed shares in Chrysler parent Stellantis fell by a similar margin, according to FactSet data. Ford slipped about 2 per cent.
Trump’s announcement was the latest in a series of tariffs he has rolled out since his return to office in January, including an additional 20 per cent levy on all goods from China, and 25 per cent on all imports of steel and aluminium into the US.
Earlier this week, Trump said the US would apply tariffs of 25 per cent on all goods imported to the US from countries that bought Venezuelan oil and gas, also beginning April 2. Those tariffs would likely hit China, India, Spain and Italy, among others.
“Basically, I view it as reducing taxes and also reducing debt,” Trump said, of his tariffs. “And within a fairly short period of time, I think we’re going to have a balance sheet that’s going to be outstanding.”
