Trump announces 25 percent tariffs on foreign-built vehicles

WASHINGTON

U.S. President Donald Trump has announced steep tariffs on auto imports and parts, provoking threats of retaliation from trading partners ahead of further promised trade levies next week.

Wall Street slumped ahead of Trump's March 26 announcement, while the world's top-selling automaker, Toyota, plunged more than three percent.

Japan's government described the announcement as "extremely regrettable," while Prime Minister Shigeru Ishiba said Tokyo was "considering all kinds of countermeasures."

"What we're going to be doing is a 25 percent tariff on all cars that are not made in the United States," Trump said as he signed the order in the Oval Office.

The duties take effect at 12:01 am (0401 GMT) on April 3 and impact foreign-made cars and light trucks. Key automobile parts will also be hit within the month.

Canadian Prime Minister Mark Carney branded Trump's tariffs a "direct attack" on his country's workers and said the cabinet would meet Thursday to discuss retaliation.

Brazil's President Luiz Inacio Lula da Silva said his country "cannot stand still" in response to the levies.

The move even appeared to raise eyebrows from Trump ally and Tesla boss Elon Musk, who said the cost impact of the tariffs on his firm's cars was "not trivial."

Peter Navarro, Trump's senior counselor for trade and manufacturing, in a briefing after Trump's announcement, blasted "foreign trade cheaters," who he said turned America's manufacturing sector into a "lower wage assembly operation for foreign parts."

He took aim at Germany and Japan for reserving the construction of higher-value parts to their countries.

Since beginning his second term in January, Trump has imposed fresh tariffs on imports from major US trading partners Canada, Mexico, and China—alongside a 25 percent duty on steel and aluminum.

The latest levies will be in addition to those already in place for products.

But the White House added that vehicles entering under the U.S.-Mexico-Canada Agreement (USMCA) can qualify for a lower rate depending on their American content.

Similarly, USMCA-compliant auto parts will remain tariff-free as officials establish a process to target their non-US content.

Uncertainty over Trump's trade plans and worries they could trigger a downturn have roiled financial markets, with consumer confidence also falling in recent months.

On March 27 in Japan, the world's top-selling automaker, Toyota, shed more than three percent. Among other carmakers, Nissan lost 2.5 percent, Honda shed 3.1 percent, and Mitsubishi Motors gave up 4.5 percent, while Mazda and Subaru both gave up around six percent.

South Korea's Hyundai retreated 2.7 percent in Seoul.

Trump has defended the levies as a way to raise government revenue and revitalize American industry.

The American Automotive Policy Council, representing Detroit's "Big Three" automakers—Ford, General Motors, and Stellantis—issued a carefully worded statement on the tariffs, saying it hoped the policy would boost U.S. auto production.

But it stressed, "It is critical that tariffs are implemented in a way that avoids raising prices for consumers."