US 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 saw a decline ahead of President Trump’s scheduled Wednesday afternoon announcement, while Toyota, the world’s leading automaker, experienced a drop of over three percent.
The Japanese government called the announcement “extremely regrettable,” with Prime Minister Shigeru Ishiba stating that Tokyo was “considering all kinds of countermeasures.”
Trump, as he signed the order in the Oval Office, announced, “What we’re going to be doing is a 25 percent tariff on all cars that are not made in the United States.”
The tariffs, which will apply to foreign-made cars and light trucks, are set to take effect at 12:01 am (0401 GMT) on April 3. Key automobile parts will also be subject to these duties within the month.
Canadian Prime Minister Mark Carney called the tariffs a “direct attack” on Canadian workers and said the cabinet would convene on Thursday to discuss potential retaliation.
Brazil’s President Luiz Inácio Lula da Silva remarked that his country “cannot stand still” in response to the new tariffs.
Even Trump ally and Tesla CEO Elon Musk appeared concerned, commenting that the tariffs would have a “not trivial” cost impact on Tesla’s vehicles, particularly those that rely on parts from other countries. He shared his thoughts on X, saying, “To be clear, this will affect the price of parts in Tesla cars that come from other countries. The cost impact is not trivial.”
Peter Navarro, Trump’s senior trade and manufacturing advisor, condemned “foreign trade cheaters” in a post-announcement briefing. He accused them of turning America’s manufacturing sector into a “lower wage assembly operation for foreign parts” and specifically criticized Germany and Japan for keeping the production of higher-value parts within their own countries.
Since taking office for his second term in January, Trump has imposed additional tariffs on imports from major U.S. trade partners, including Canada, Mexico, and China, along with a 25 percent duty on steel and aluminum.
These new tariffs will add to the existing ones already in place.
However, the White House noted that vehicles entering the U.S. under the US-Mexico-Canada Agreement (USMCA) could qualify for a lower tariff rate, depending on their American-made content. Additionally, USMCA-compliant auto parts will remain free from tariffs while officials establish a process to target parts with non-U.S. content.
