Trump sets auto tariffs at 25%, drawing swift backlash. ‘The tariffs announced today will harm—not help,’ says world’s largest business association.

• The shares of cars, including General Motors and Stellantis, fell while manufacturers were waiting for the latest tariff for Trump on Wednesday. Dow Jones Us Auto Manufacturers has decreased by 5 %, while Elon Musk’s Tesla decreased by 5.6 %. Industry estimates raised that prices rise to $ 10,000 due to the impact of fees.

President Trump announced forward the new definitions of external cars and light trucks by 25 %, and announced from the Oval Office on Wednesday. Trump said that the new customs duties will be released on April 2 “and we will start assembling on April 3,” adding that the fees will not reach the cars built in the United States.

“This will build a lot of plants, in this case, many car factories,” Trump said during the press conference. Trump said he expected definitions to enhance an increase in car manufacturing in the United States, which leads to low consumer prices. He also suggested that the White House may move forward in plans to allow consumers to deduct interest payments on car loans from tax bills if the car is manufactured in the United States

“I think our car business will flourish as it has not flourished before,” Trump said. He said that the police “very strong” will correspond to a 25 % tariff. “This is permanent. 100 %,” Trump said.

Customs duties were initially appointed on March 4, but Trump later announced modifications to imports from Canada and Mexico to reduce pressure on American car manufacturers and give them time to prepare. The administration imposed 25 % of the fees on the goods from Canada and Mexico, but it allowed to stop cars and goods circulating through the USMCA trade agreement. After that, Trump has set a final date on April 2 to announce the mutual customs tariffs and definitions of imported cars in the United States, but reflected the path and the tariff declaration dropped a week ago.

The period of allowing one month came on the definitions by 25 % on cars and auto parts after Trump spoke to representatives from Ford, General Motors and Stelantis. Trump also expanded the period of allowing other commodities from Mexico and Canada. At that time, Trump asked companies to “start investing, start moving, and transfer production here.”

However, experts said that the expansion of definitions to auto parts with steel and aluminum will lead to huge costs for consumers, car manufacturers and their suppliers. Moreover, setting the supply chain of manufacturing often takes years, not weeks, experts said. The Associated Press reported that nearly five cars and trucks were sold in the United States built in Canada or Mexico. In 2024, the United States imported 79 billion dollars from Mexico and $ 31 billion from Canada. As for auto parts, imports of $ 81 billion in Mexico have arisen and $ 19 billion from Canada.

” luck. “These automatic definitions come to the customs tariffs on steel, aluminum and commodities from Canada and Mexico. With an additional mutual tariff expected on April 2, the customs tariff in the auto sector is enormous.”

Kane Kim, the chief economist in KPMG, wrote in a Wednesday note that vehicle and parts have jumped 4 % in February, which is the most important increase in three years. The height was the result of the front work in the auto industry to lock prices before the definitions became valid. Kim wrote that industry estimates have linked price increase on new vehicles in a range of about 2000 dollars to $ 10,000 or more, which will represent an increase of 20 % over the average treatment price of $ 48,500.

“Consumers are already reeling from high inflation,” Kim wrote. “Talk about the shock of stickers.”

In general, spending decreased by 0.3 % in February, which is the most important decrease in seven months, according to Kim, due to unconfirmed economic expectations.

“The decrease can be an early indication that business leaders are back away from spending on future capital due to the uninhabited tariff environment.

According to Scott Lincum, Vice President of the General Economy at the Tank Kato Libertary Institute, the tariff of cars will not only raise prices on cars, but will harm the United States car manufacturer. He wrote that free trade and investment has been recognized long ago that free trade and investment have fueled growth and stability in the automotive industry since the 1990s.

“This is the reason, when Trump threatened the new definitions on car commodities in 2018, mainly every major American business group – the coalition of auto manufacturers (which includes automotive companies in Detroit), the Global Car Manufacturers Association, the auto and equipment manufacturers Association, the National Manufacturers Association, the American Trade Chamber, and the business field, as is the case in all car halls.

This story was originally shown on Fortune.com

2025-03-26 21:49:00