WASHINGTON: US President Donald Trump on Wednesday (Mar 26) announced plans for long-promised tariffs of up to 25 per cent on automotive imports, widening the global trade war he kicked off upon regaining the White House this year.
Automotive industry experts expect the move will drive up prices and stymie production.
“What we’re going to be doing is a 25 per cent tariff for all cars that are not made in the United States,” Trump said at an event in the Oval Office.
“We start off with a 2.5 per cent base, which is what we’re at, and go to 25 per cent.”
Trump, who sees tariffs as a tool to raise revenue to offset his promised tax cuts and to revive a long-declining US industrial base, said the new import taxes will go into effect on Apr 2, the same date he plans to announce reciprocal tariffs aimed at the countries responsible for the bulk of the US trade deficit.
Collection of the new auto tariffs would begin on Apr 3. Besides cars, it will also impact light trucks.
Details of the proclamation Trump signed were still emerging, but their legal basis was a 2019 national security investigation into auto imports that Trump’s first administration conducted, according to a photo of his signed proclamation seen by Reuters.
The proclamation invokes Section 232 of the Trade Act of 1962. The 2019 investigation found that auto imports impair US national security, but at the time, Trump did not take action to impose tariffs.
The directive also exempts automotive parts that are compliant with the US-Mexico-Canada Agreement on trade that Trump negotiated during his first term.
The agreement allows for largely duty-free trade between the US and its two largest trading partners.
“USMCA-compliant automobile parts will remain tariff-free until the Secretary of Commerce, in consultation with US Customs and Border Protection (CBP), establishes a process to apply tariffs to their non-US content,” White House principal deputy press secretary Harrison Fields said on X.
The US imported US$474 billion worth of automotive products in 2024, including passenger cars worth US$220 billion.
Mexico, Japan, South Korea, Canada and Germany, all close US allies, were the biggest suppliers.
Trump will grant up to a one-month reprieve for auto parts imports from his new automotive tariffs, according to his signed proclamation.
