Former President Donald Trump has announced a new set of tariffs targeting foreign-made vehicles and certain auto parts. The new policy imposes a 25% duty on all cars, light trucks, and specific auto components manufactured outside the United States. The tariffs will take effect on April 2, 2025.
Speaking from the White House on Wednesday, Trump said the move aims to boost American manufacturing and protect U.S. jobs. “This will continue to spur growth that you’ve never seen before,” he declared while signing an executive order formalizing the tariffs.
The White House estimates that the new tariffs will generate $100 billion in annual revenue through import duties.
Immediate Impact on Auto Stocks
Shares of major U.S. and European automakers fell following the announcement.
General Motors (GM), Ford (F), Stellantis (STLA), and Tesla (TSLA) all traded lower in after-hours trading. Meanwhile, shares of BMW (BMW.DE), Porsche (P911.DE), Volkswagen (VOW.DE), and Mercedes-Benz (MBG.DE) dropped earlier in the day after the news broke.
White House Press Secretary Karoline Leavitt previewed the announcement during a press briefing, contributing to early market reactions.
What’s Included in the Tariffs?
The new tariffs target not only foreign-built vehicles but also specific auto parts.
According to the executive order and a detailed fact sheet from the White House, the tariffs will apply to:
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Cars and light trucks manufactured outside the U.S.
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Engines
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Transmissions
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Powertrain parts
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Electrical components
These measures are an extension of existing tariffs and will impact the supply chain of both foreign and U.S.-based automakers.
How Will This Affect Automakers?
Although the tariffs primarily target foreign manufacturers, U.S. automakers have also raised concerns.
Companies like GM, Ford, and Stellantis produce many vehicles and parts in Canada, Mexico, and China. They anticipate increased production costs due to disruptions in the global auto supply chain.
Auto industry experts say these tariffs could have broad economic effects.
Dan Ives, a leading analyst at Wedbush Securities, commented:
“In our view, these initial tariffs, if they hold in their current form, would be a hurricane-like headwind to foreign (and many U.S.) automakers. They could push the average price of cars up by $5,000 to $10,000, depending on the make and model.”
European automakers are already strategizing their next steps.
BMW announced it would temporarily absorb the added costs. Porsche indicated it may pass the extra costs directly to consumers.
Price Hikes Expected for Consumers
Economic analysts predict that the new tariffs will likely raise car prices for American buyers.
Data firms suggest non-premium foreign vehicles may see price hikes ranging from $3,000 to $12,000 per unit.
This could affect millions of Americans who rely on affordable, foreign-made vehicles.
The broader economic impact will depend on how long the tariffs remain in place and whether other countries retaliate.
Trump Declares “Liberation Day” for U.S. Industry
Trump has declared April 2 — the day the tariffs take effect — as “Liberation Day.”
He said the move is intended to protect American industries from what he called “decades of unfair trade practices” by other countries.
“They’ve ripped us off for far too long,” Trump stated during the announcement. “These tariffs are fair, reciprocal, and necessary.”
The administration is expected to announce additional tariffs on other foreign products on the same date.
What’s Next for the Auto Industry?
Industry experts believe the tariffs could trigger trade tensions, especially with Europe and Asia.
Some analysts suggest the tariffs may be used as a negotiation tool, possibly leading to trade talks or adjustments in the coming weeks.
Dan Ives added:
“We expect to learn more over the next week, but for now, investors and automakers will be frustrated by this announcement, with few details provided.”
The full economic impact of the new tariffs will become clearer over the next few months as automakers adjust their supply chains and pricing strategies.
Source : daljoog news
