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U.S. imposes 25% tariff on imported cars, expected to raise vehicle prices and disrupt supply chains.
Sina Finance 2025-04-03 13:52:24

The measure of U.S. President Trump imposing a 25% tariff on imported cars officially took effect after midnight on Thursday in Washington time, which is expected to significantly increase the cost of the automotive industry and disrupt the supply chain.

According to Trump's announcement of the plan last week, some auto parts will also be subject to tariffs at the same rate no later than May 3. These tariffs could lead to new car prices rising by thousands of dollars and have an impact on auto sales.

On Wednesday, Trump also announced that the United States would impose a starting 10% reciprocal tariff on all imported goods, with more than 60 countries and regions with the largest trade deficits facing even higher rates. Although the reciprocal tariffs do not apply to imported automobiles and auto parts, automakers have already been impacted by the escalating trade war.

"Although the auto industry may have dodged a bullet, we remain concerned that auto and parts tariffs will be here to stay for the long term and will bring a significant cost burden," Bernstein analyst Daniel Roeska said in a note to clients.

Officials said that the United States will maintain a 25% tariff on Canada and Mexico related to drug trafficking and illegal immigration, but at the same time, the two countries are not within the scope of the United States' retaliatory tariffs. Goods covered by the United States-Mexico-Canada Agreement, which Trump promoted during his first presidential term, will continue to be exempt from tariffs.

Auto industry executives have been lobbying the Trump administration for weeks in an effort to mitigate the impact of the trade war.Ford Motor Company(10.15, 0.21, 2.11%)General Motors(47.98, 0.72, 1.52%)Stellantis NV, the parent company of Chrysler, recently called for the exclusion of some low-cost auto parts from tariffs.

 

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