Trump Slaps 25% Tariff On Imported Cars, Promises Zero Tariffs For US Manufacturing; Canada Reacts

“What we’re going to be doing is a 25 percent tariff on all cars that are not made in the United States. If they’re made in the United States, it is absolutely no tariff," Trump said at the White House.

Since his return to the White House in January this year, Trump has already imposed tariffs on imports from major trading partners of the US such as Canada, Mexico and China, as well as 25% duty on steel and aluminum imports.

But earlier, he gave carmakers a temporary break from the taxes on North American vehicles.

The White House, in a statement, said that the 25% tariff will be applied to imported passenger vehicles such as sedans, SUVs, crossovers, minivans, cargo vans, and light trucks, as well as key automobile parts like engines, transmissions, powertrain parts, and electrical components.

It added that the tariffs could be expanded to additional parts if necessary.

The Trump administration has said that the tariffs are a way to raise government revenue, revitalise American industries, and bring other nations on the terms set by the US.

However, imposing tariffs on imported cars may affect ties with countries such as Japan, South Korea, Canada, Mexico and Germany – close US partners.

Canada Reacts To Trump’s Auto Tariffs

Reacting to Trump’s tariffs on cars and components, Canadian Prime Minister Mark Carney on Wednesday said that Canada will soon respond to new tariffs with retaliatory measures against the US.

He said that Trump’s move was a “direct attack" and said that he would convene a cabinet meeting on Thursday to decide on his country’s response.

Carney said Trump’s move was “a direct attack" and told reporters he would be convening a high-level cabinet meeting on Thursday to decide on a response.

“We will defend our workers, we will defend our companies, we will defend our country, and we will defend it together," he said.

Canada has already announced a C$155 billion package of retaliatory tariffs, to be implemented in stages based on Trump’s actions.

Around half of the cars sold in the United States are manufactured within the country. Among imports, nearly half come from Mexico and Canada, while Japan, South Korea, and Germany remain key suppliers.

The Center for Automotive Research previously estimated that US tariffs — on metals and imported cars — could raise car prices by thousands of dollars and hurt the job market in the country.

Besides the automobile industry, the US President has also been targeting sector-specific tariffs on industries such as pharmaceuticals and semiconductors. On Wednesday, Trump reaffirmed his intent to impose tariffs on lumber and pharmaceuticals.

(With AFP inputs)