President Donald Trump on Wednesday announced plans to slapped 25% of tariffs on all imported cars, increasing a global commercial war only weeks after previous tariffs fired a defeat from the market and caused concern about a possible recession.
“I think our automotive industry will flourish as before,” Trump said.
Automatic tariffs are ready to attack a sector that uses more than one million American workers and depends on a closely intertwined supply chain with Mexico and Canada. The tariffs placed the risk of the automotive industry to raise car prices for US consumers, experts previously said to ABC News.
Trump announced tariffs earlier this month about a large part of the imports of US cars when he slapped the 25% tariffs in Mexico and Canada, but the president shortly after issued a delay of tariffs related to the car associated with that policy.
The White House Secretary, Karoline Leavitt, foreseen fresh cars rates in comments on Wednesday afternoon, sending us lower actions.
The industrial average Dow Jones closed 130 points, or 0.3%, while the S& P 500 fell 1.1%. Technological heavy nasdaq decreased by 2%.
The actions of American car manufacturers also fell. Tesla, the electric car manufacturer led by Advisor Trump Elon Musk, closed 5.5%. General Motors’ shares fell 3%.
Mexico and Canada make up the two main US commercial partners for finished motor vehicles and car parts, according to an analysis of the Data Cato Institute of the United States International Trade Commission.
In 2023, Canada and Mexico represented almost $ 120 billion in imports of motorized vehicles in the United States, which totaled approximately 47% of all imported vehicles that year. Canada and Mexico constituted almost the same part of the imports of auto parts that year, showed the analysis of the Cato Institute.
The White House Secretary, Karoline Leavitt, speaks during the daily information session in the Brady Brady Room of the White House in Washington, on March 26, 2025.
Carlos Barria/Reuters
The announcement of car rates comes days before Trump issues a new round of duties on April 2. Trump has repeatedly referred to that date as “day of liberation”, saying that a wide list of reciprocal tariffs referred to US business relations.
Speaking at the White House on Monday, Trump softened his position, saying that reciprocal tariffs may not reach the rate that countries aimed at US assets.
“I can give many countries in countries,” Trump told journalists in the Oval office. “I am ashamed to charge them what they have accused us.”
Automatic tariffs follow a large number of duties taxed earlier this month. Trump slapped tariffs to China in early March, increasing taxes on the assets of that country to 20%. Days later, Trump imposed radical tariffs in all imports of aluminum and steel.
The movements caused retaliation rates of China, the European Union and Canada, triggered a commercial war that started the stock market and caused Wall Street warnings of a possible recession.
Economists expect tariffs widely increase prices for consumers, since importers generally transmit a part of the tax burden on buyers.
Speaking at a press conference in Washington, DC, last Wednesday, the president of the Fed, Jerome Powell, criticized tariffs for a “good part” of recent inflation.
