President Trump Announces 25% Tariffs on Imported Cars

• President Donald Trump is imposing a 25% tariff on vehicles imported into the United States.
• The tariff applies to any new fully assembled vehicle that is built outside the U.S.
• The tariffs go into effect on April 2.

Update, April 2: President Donald Trump's administration confirmed that the 25% tariff on all imported cars will go into effect at 12:01 AM EDT on Thursday, April 3. Tariffs on automotive parts will be delayed until May 3. We still don't know how much the prices of cars will go up or what moves manufacturers will make to potentially keep prices down, but prices are certainly due to rise. Cars from companies that comply with the USMCA will only have to pay the duty on the non-American content of the vehicle. That said, there is not a single car on sale that is 100% manufactured in the U.S. and doesn't use parts that are imported from somewhere so prices will start to change soon.

President Donald Trump on Wednesday announced a 25% tariff on cars that are imported into the United States. The tariffs go into effect on April 2.

"The 25% tariff will be applied to imported passenger vehicles (sedans, SUVs, crossovers, minivans, cargo vans) and light trucks, as well as key automobile parts (engines, transmissions, powertrain parts, and electrical components), with processes to expand tariffs on additional parts if necessary," the White House said in a statement. This means that vehicles built in the U.S. that rely heavily on foreign parts will be affected by the tariffs.

Nearly half of all vehicles sold in the U.S. are imported from Canada, Europe, Mexico, Japan and more.

Additionally, "Importers of automobiles under the United States-Mexico-Canada Agreement will be given the opportunity to certify their U.S. content and systems will be implemented such that the 25% tariff will only apply to the value of their non-U.S. content," the White House said. This corresponds with a previous announcement Trump made after the tariffs were first brought up in early March.

The tariffs are bad news for the auto industry as a whole. During an investor conference in February, Ford CEO Jim Farley said, "If you look at the tariffs, let's be real honest, long term, a 25% tariff across the Mexico and Canadian border will blow a hole in the U.S. industry that we have never seen."

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