In an unprecedented move that is sending shockwaves through the global automotive industry, President Trump just declared a 25% import tax on cars and car parts. This tax will be imposed on all foreign-built vehicles sold in the United States. These new tariffs are scheduled to take effect on April 2. This surprising decision has elicited extraordinarily strong international reactions, with at least five other major economies threatening retaliation.
Germany has been a particularly strident opponent of the new import taxes. They announced that they “will not cave” and called on Europe to “react strongly” against the tariffs. France’s president reacted sharply to the proposal, calling it “a waste of time” and “incoherent.” Canada, in return, labelled the new import taxes a “direct attack.” In retaliatory fashion, China fired back, claiming that Washington was in breach of international trade norms.
Beginning April 3, companies that bring vehicles into the country will face higher fees. Meanwhile, taxes on finished products will probably start in May or later. So the UK is in active last-minute negotiations with the White House. They are more than determined to get an exemption, demonstrating their important economic and fair-trading relationship with the US.
Trump’s decision to implement these tariffs follows a brief pause at the beginning of March after major North American carmakers, including Ford, General Motors, and Stellantis, appealed for reconsideration. Even in the face of consumer groups predicting increased costs to consumers, Trump isn’t worried.
“I couldn’t care less,” he stated regarding possible price increases by carmakers, adding his hope that foreign manufacturers would raise prices so that “people are gonna buy American-made cars.”
The past president also doubled down on the advantages of making things in the US.
“If you don’t, you’re going to have to probably come to the United States, because if you make your car in the United States, there is no tariff.”
The UK is pursuing a unique position due to its more equitable trade relations with the US, unlike other countries facing these tariffs.