President Donald Trump has announced a 25% tariff on all foreign-made cars and specific auto parts. The new policy, set to take effect on April 2, aims to boost U.S. car manufacturing by encouraging automakers to produce vehicles domestically.
As a result, all imported cars and select auto components will be subject to this tax. While car duties will begin on April 2, tariffs on parts may be delayed for a month. Moreover, the administration expects these tariffs to generate around $100 billion annually. Meanwhile, vehicles from Canada and Mexico that meet USMCA rules will be exempt for now, but officials will closely monitor compliance.
Consequently, industry experts warn that new car prices could increase by $5,000 to $10,000. This, in turn, may lead to lower demand and disruptions in the supply chain. Notably, stock prices for major automakers like Ford, GM, and Mitsubishi have dropped.
On the international front, Canadian Prime Minister Mark Carney has strongly opposed the decision, calling it a direct attack on Canadian auto workers. Similarly, the European Union and other trade partners are considering countermeasures in response.
Furthermore, critics argue that the tariffs will drive up production costs and lead to job losses in the auto sector. However, Trump’s team insists that the policy will strengthen local industries and reduce reliance on foreign suppliers.
Overall, this move represents a major shift in U.S. trade strategy, with far-reaching implications for the automotive industry worldwide.
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