President Donald Trump announced Wednesday that he will apply a 25% tariff on all vehicle imports into the United States.
In a bid to protect domestic auto manufacturing, the President plans to impose the levy on any vehicles produced outside the U.S. borders.
“What we’re going to be doing is a 25% tariff on all cars that are not made in the United States. If they’re made in the United States, there’s absolutely no tariff,” the President said in a briefing from the White House on March 26.
The Trump administration is expected to announce additional trade policy on April 2, with auto tariffs slated to begin the following day.
A senior administration official said the tariffs will apply to finished automobiles and automotive parts. While tariffs will not immediately be imposed on auto parts that remain compliant with the U.S.-Mexico-Canada Agreement, White House Deputy Press Secretary Harrison Fields said levies would eventually be applied against any non-U.S. content in the imported parts.
The newly announced 25% tariff will be added to the existing duties, like the current 25% levy already on light trucks imported into the United States.
While Canada, a major exporter of vehicles to the United States, has not announced any reciprocal action to the latest announcement, the country’s prime minister, Mark Carney, called the move a direct attack on Canadian workers.
“It’s clear that this is a violation and he has betrayed our trade agreement,” said Carney, per The Wall Street Journal.
According to the Canadian Vehicle Manufacturers’ Association, automobiles are the country’s second-largest export, with 93% sent to the U.S. alone in 2023. Within the United States, around half of the vehicles sold last year were assembled in another country, with Mexico being the biggest auto exporter to the U.S.