President Donald Trump said Wednesday he was imposing a 25% tariff on all autos coming into the U.S.
Trump said he expects auto firms to relocate to the U.S. and build new sites, or expand existing ones. He hit out at companies that have opened facilities in Canada and Mexico in recent decades, at what he said were the expense of U.S. workers.
“If you build your car in the U.S., there’s no tariff,” Trump said.
He said the tariffs would go into effect April 2 and would be “permanent.”
Shares of the top U.S. automakers fell sharply in after-hours trading on the announcement. Ford Motor shares dropped 2%, General Motors tumbled 2.3% and Jeep owner Stellantis declined 3%.
The 25% tariffs will almost certainly increase the cost consumers will pay to buy new vehicles affected by the duties.
Eight of the top-10 “most American” vehicles whose parts and assembly are undertaken in the U.S. are actually foreign-owned companies, according to Cars.com. Its full list of the most-American-made brands can be found here.
“It always surprises car shoppers that the badge on the hood doesn’t always reveal a vehicle’s economic contributions. In fact, 66% of vehicles on Cars.com’s 2024 American-Made Index come from foreign automakers that support communities in Alabama, Indiana, Michigan and Ohio,” Cars.com said in a release last year.
Half of all vehicles sold in the U.S. in 2023 were imports, according to Cars.com. Popular autos that see some or all models assembled abroad, according to Autoweek, include:
- Audi Q5
- Buick Encore GX
- Chevrolet Silverado 1500
- Chrysler Pacifica and Voyager
- Ford Maverick
- Ford Bronco Sport
- Ford Mustang Mach-E
- GMC Terrain
- Ram 1500 and 2500
- VW Jetta, Taos and Tiguan
“If a 25% tariff is imposed, prices could increase by as much as $12,000 for some models, or as little as $4,000 for others, in both cases a cost that will almost certainly be passed on to US buyers,” Autoweek said.
Alongside Tesla’s assembly plant in Fremont, California, the U.S. South has increasingly displaced the Midwest as a growing hub of American auto manufacturing.
The new announcement of the duties come a week ahead of Trump’s planned “Liberation Day” on April 2, when he has promised to roll out a bevy of new tariffs against many of America’s largest trading partners, including long-time allies, that will affect a broad range of goods. Trump had hinted in recent days that a separate statement on auto tariffs could come ahead of next week.
Previously, Trump indicated he was receptive to pleas from U.S. automakers that tariffs would harm their businesses. He gave them a one-month reprieve from duties on Canada and Mexico that ultimately evolved into indefinitely waiving the levies for all items covered by the U.S.-Mexico-Canada free-trade agreement.
Trump’s on-again, off-again announcements have roiled markets in recent weeks while ratcheting up uncertainty in the economy. That has led to declining business and consumer confidence.
While some economic indicators have suggested the American economy remains in solid shape, the Commerce Department reported Tuesday that orders for business equipment placed with U.S. factories unexpectedly declined 0.3% last month, the first drop since October.
Meanwhile, S&P Global reported this week that U.S. manufacturing activity slipped back into contraction territory, thanks to a rise in materials costs related to tariffs, while the outlook for the services sector deteriorated.
Steve Kopack contributed.
