President Donald Trump announced plans to impose a 25% tariff on cars imported into the United States. The tariffs are set to go into effect on April 2, with collections starting the following day. The announcement drew swift condemnation from various quarters.
Canadian Prime Minister Mark Carney described it as a “direct attack” on Canadian workers and companies. “We will defend our workers, we will defend our companies, we will defend our country, and we will defend it together,” Carney declared. European Commission President Ursula von der Leyen called the move “bad for businesses, worse for consumers.” She emphasized the potential negative impacts on the global economy.
Japanese Prime Minister Shigeru Ishiba indicated that his government was considering “appropriate measures” in response. South Korea’s industry minister, Ahn Duk-geun, pointed to “considerable difficulties” the nation’s auto sector could face and mentioned an emergency response being planned. Trump suggested the move would spur economic growth, but both corporate leaders and economists have expressed concerns.
Trump’s tariff impact on auto industry
A study by Anderson Economic Group estimated that blanket tariffs on countries like Canada and Mexico could increase U.S. car prices by as much as $12,000. The announcement caused shares of automakers to fall in after-hours trading.
U.S. equity index futures also slid, indicating a lower open for stock markets. International automakers saw significant declines, with Hyundai Motor and its affiliate Kia Corp losing more than 3% each in South Korea. Japan’s Toyota, Nissan, and Honda also experienced drops in early trading.
White House official Will Scharf claimed the new car tariffs would generate more than $100 billion in annual revenue for the U.S. However, industry groups, including the Canadian Chamber of Commerce, warned of severe job losses and the potential erosion of North America’s auto industry leadership. Tesla CEO Elon Musk commented that the tariffs could be “net neutral” for Tesla, but also noted that the impact on his company would still be significant. Public sentiment reflects widespread worry about the financial implications of the tariffs.
A survey found that 90% of Democrats, 69% of independents, and 57% of Republicans were concerned about the impact on their finances. As the international community and businesses brace for the impact of these tariffs, the full ramifications on trade relations and the global economy remain to be seen.
