Washington, March 27 – US President Donald Trump has officially announced the imposition of a 25 percent tariff on imported automobiles and key auto parts, a move set to take effect from April 2. The declaration was made on Wednesday during a press briefing at the Oval Office in the White House.
As per agency report, Trump signed a proclamation under Section 232 of the Trade Expansion Act of 1962, citing national security threats as the basis for this decision. The tariffs will apply to all cars not manufactured in the United States, and collections will begin from April 3.
The White House stated that the new tariff will cover imported passenger vehicles such as sedans, SUVs, crossovers, minivans, cargo vans, and light trucks. Additionally, it will apply to major automobile components, including engines, transmissions, powertrain parts, and electrical components. A provision to extend these tariffs to additional parts, if required, has also been outlined.
Under the United States-Mexico-Canada Agreement (USMCA), importers of automobiles will have the opportunity to certify their use of American-made content. Only those components not manufactured in the US will be subjected to the new 25 percent tariff.
Currently, the US imposes a general 2.5 percent tariff on imported vehicles, while light trucks face a 25 percent tariff. The new levy will be imposed in addition to existing duties, further increasing the cost burden on non-US-made vehicles and components.
President Trump justified the move by stating that the tariffs would strengthen domestic manufacturing, generate new revenue for the government, and aid in reducing the national debt. However, economists have expressed concern that these tariffs may raise automobile prices, impacting consumers who are already dealing with high costs.
Gary Clyde Hufbauer, a non-resident senior fellow at the Peterson Institute for International Economics, told Xinhua that the decision is a significant blow to the auto industry. He noted that shares of major automakers like Ford and General Motors dropped sharply after the announcement. Hufbauer warned that higher vehicle costs could suppress demand, especially as consumers face economic uncertainty, and predicted substantial job losses in US auto and parts manufacturing sectors.
