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On Wednesday, Donald Trump announced that the US will implement a 25 percent tariff on imports of foreign-manufactured vehicles, marking a significant intensification of his trade conflict with US allies.
The tariffs are set to take effect on April 2, which is Trump’s self-imposed deadline for revealing several mutual tariffs against US trading partners.
“Today marks the start of Liberation Day in America,” Trump stated during a press conference in the Oval Office on Wednesday evening. “If you manufacture your vehicle in the United States, there will be no tariff,” he emphasized.
When questioned about possible actions car manufacturers could take to eliminate the tariffs, Trump answered: “This is a permanent measure, 100 percent.”
Earlier this month, Trump had granted a temporary reprieve to the auto industry by exempting all items that adhered to the conditions of the 2020 US trade agreement with Canada and Mexico from the new tariffs.
During Wednesday’s announcement, Trump did not specify any such exemptions regarding the auto tariffs. “Primarily, I believe it will lead to vehicle production being centralized in one area,” he stated.
Automakers have vigorously opposed the tariffs, arguing that they would disrupt their supply chains and elevate vehicle prices for American consumers.
Following the announcement, General Motors’ stock fell by 4 percent in after-hours trading, and shares of Chrysler’s parent company Stellantis experienced a similar drop, according to FactSet data. Ford’s stock decreased by approximately 2 percent.
Trump’s announcement adds to a series of tariffs he has instituted since returning to office in January, which includes an additional 20 percent tax on all imports from China, as well as a 25 percent tariff on all steel and aluminum imported into the US.
Earlier this week, Trump indicated that the US would impose a 25 percent tariff on all goods imported from countries purchasing Venezuelan oil and gas, set to take effect on April 2. This move would particularly affect nations such as China, India, Spain, and Italy.
“Essentially, I consider this a means of lowering taxes and mitigating debt,” Trump remarked regarding his tariffs. “In a relatively short period, I believe we’ll achieve an outstanding balance sheet.”
