US President Donald Trump has 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 in a move auto industry experts expect 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 has long promised higher duties on imported cars, and the timing of the announcement suggests that they would coincide with his April 2 plans for reciprocal tariffs aimed at the countries responsible for the bulk of the US trade deficit.
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, has for weeks promised to announce those levies, and possibly some additional sectoral tariffs, on April 2.
Shares of US-listed automakers fell on news of the press conference on concerns that tariffs would send shock waves through a global auto industry that is already reeling from uncertainty caused by Trump’s rapid-fire tariff threats and occasional reversals.
The US stock market also closed lower on worries over tariffs, which have dogged investors for much of the last month. The benchmark S&P 500 Index fell 1.1 per cent ahead of the press conference, and is down more than four per cent so far in March for its worst monthly performance in nearly a year.
Tariffs could drive costs of cars higher for consumers by thousands of dollars, hitting new vehicle sales and resulting in job losses, since the US car industry relies heavily on imported parts, according to the Center for Automotive Research.
The US imported $US474 billion ($A751 billion) worth of vehicle products in 2024, including passenger cars worth $US220 billion.
Mexico, Japan, South Korea, Canada and Germany were the biggest suppliers.
Cox Automotive, a car services provider, on Wednesday forecast that if there are no tariff carve outs for the auto industry on imports from Mexico and Canada, $US3000 would be added to the cost of a US-made vehicle and $US6000 on a vehicle made in Canada or Mexico.
Since taking office on January 20, Trump has announced and delayed tariffs on Canada and Mexico for what he alleges is their role in allowing the opioid fentanyl into the US; set import taxes on goods from China for the same reason; launched hefty duties on imports of steel and aluminium; and has repeatedly touted his plans to announce global reciprocal tariffs on April 2.
with AP