- Promising tasks for a long time on observed cars increasing prices.
- Automobile actions and the wider market are plummeting on price concerns.
- The car rates come into force after midnight on April 3.
President Donald Trump unveiled a 25% rate on imported cars and light trucks on Wednesday from next week, expanding the World Trade War that he launched during the retirement of the White House this year in a move of experts from the automotive industry will expect to increase prices and stacking production.
“What we are going to do is a 25% rate for all cars that are not made in the United States,” said Trump at an event at the Oval Office.
Trump, who considers prices as a tool to increase income to compensate for his promised tax reductions and to relaunch a long -term industrial base, said the collections would begin on April 3, the day after his intention to announce reciprocal rates intended for countries responsible for the essentials of the American trade deficit.
The president of the European Commission, Ursula von der Leyen, described this decision as “bad for businesses, worse for consumers”, while Canadian Prime Minister Mark Carney described as “direct attack” against Canadian workers.
“We will defend our workers, we will defend our businesses, we will defend our country and we will defend it together,” Carney told journalists in Ottawa.
The united automotive workers, who represent the Big Three Detroit factory workers, car manufacturers of Detroit and are long-standing criticisms of the free trade agreements which, according to them, have destroyed American jobs, welcomed him.
“These prices are a major step in the right direction for car workers and blue-collar communities across the country, and it is now on car manufacturers, from the three large to Volkswagen and beyond, to bring good union jobs to the United States,” said UAW president Shawn Fain, in a press release.
“With these prices, thousands of well-paid blue collar car jobs could be brought back to workers’ communities across the United States in a few months, simply adding changes or additional lines in a certain number of underused car factories.”
The actions of car manufacturers have dropped in the event of negotiation after opening hours and term contracts on the American shares index, indicating that the actions were led Thursday to a lower open.
The legal basis for action is a 2019 national security survey under article 232 of the 1962 law on automotive imports carried out by Trump’s first administration. This survey noted that automobile imports harm US national security, but at the time, Trump did not take any measures to impose prices.
In an indication of the haste with which the new samples are imposed, the Trump directive included temporary exemptions for automotive parts while government officials sort the complexity of transforming its proclamation into practice.
For the moment, he exempts, for example, automobile parts in accordance with the American-mexico-Canada (USMCA) agreement on the trade that Trump negotiated during his first mandate. The agreement allows a largely free trade between the United States and its two largest trade partners.
“Automotive parts in accordance with the USMCA will remain without a price until the Secretary of Commerce, in consultation with customs and the protection of American border (CBP), establishes a process to apply prices to their non -American content,” said the main assistant press secretary of the White House, Harrison Fields on X.
It still exempts until May 3 all other import parts imports.
Brad Setser, a former US Treasury official now with the foreign relations council, said that some 4 million cars in Canada and Mexico were now confronted with 25% or more prices, which would probably increase prices and reduce the sales of American cars for “some time”.
He said the prices were a “clear violation” of the USMCA and also raised questions about the South Korea free trade agreement.
The economic impact could be important, he said, noting that American imports of finished vehicles are close to a percentage point of the American gross domestic product.
The United States imported $ 474 billion in car products in 2024, including private cars worth $ 220 billion. Mexico, Japan, South Korea, Canada and Germany, all close to the American Allies, were the largest suppliers.
Stocks fall
Before Trump’s announcement, the actions of car manufacturers listed in the United States fell on concerns that prices would send shock waves via a global automotive industry which is already in shock from the uncertainty caused by the rapid price threats of Trump and occasional inversions.
Musk posted later on X that Tesla would not be unscathed. “The price impact on Tesla is always significant,” he wrote.
General Motors’ shares fell 8% in trade after the market. Ford’s shares and American negotiated American-Parent Stellantis actions fell by approximately 4.5% each. In Asia, Toyota Motor’s actions, Honda Motor and Hyundai Motor all lowered between 3% and 4%.
Tesla’s actions, which make all the cars sold in the United States locally, but with certain imported parts, fell 1.3%. Trump said the tasks announced on Wednesday could be a net neutral or even good for Tesla. He said that the CEO of the company and his close ally Elon Musk had not advised him on the prices on the cars. Musk posted later on X that Tesla would not be unscathed. “The price impact on Tesla is always significant,” he wrote.
Companies have not immediately returned emails asking for comments.
The US stock market has also closed its doors on prices, which darkened investors for much of last month. The S&P 500 .SPX reference index dropped 1.1% before the press conference and is down more than 4% until now in March for its worst monthly performance in almost a year.
Trump’s prices and threats to impose them have sowed uncertainty in companies and have shot the world markets since returning to the White House in January. Trump reiterated on Wednesday, reiterated that he expects the car rates to encourage car manufacturers to invest more and more in America instead of Canada or Mexico.
“Companies that have invested hundreds of millions and billions of dollars on factories in Canada and Mexico will probably see their profits considerably reduced in the coming quarters, if not in a few years,” said Sam Fiorani, analyst at Autofore Solutions.
“We are going to try to adjust our sales and production forecasts, because that will throw everything into chaos.”
Autos Drive America, a group representing large foreign car manufacturers, notably Honda, Hyundai, Toyota and Volkswagen Vowg.de, said that “prices imposed today will make cars more expensive and selling cars in the United States, which ultimately leads to higher prices, less options for consumers and less manufacturing jobs in the United States”.
Car manufacturers in North America are largely benefiting from free trade status since 1994. The Mexico-Canada of Trump’s American agreement (USMCA) has imposed new rules designed to increase the production of regional content.
After launching 25% of prices on Mexico and Canada at the beginning of March, Trump granted a one -month stay for vehicles produced in accordance with the terms of its USMCA, which benefited American companies.
The new rules do not extend this stay.
“Companies that have invested hundreds of millions and billions of dollars on factories in Canada and Mexico will probably see their profits considerably reduced in the coming quarters, if not in a few years,” said Sam Fiorani, analyst at Autofore Solutions.
“We are going to try to adjust our sales and production forecasts, because that will throw everything into chaos.”
The White House said that 25% tariffs on automotive parts imported in the United States will start at the latest on May 3, taxing key automobile parts, including motors, transmissions, parts of the powertrain and electrical components.
The automotive importers under the USMCA will have the opportunity to certify their American content so that only their non -American content is taxed, said the White House.
Regarding the announcement on April 2, Trump said that the measures are not the samples as he was walking to impose.
“We are going to make it very forgiving,” said Trump. “I think people will be very surprised. It will be, in many cases, less than the price they have been invoicing (the United States) for decades.”
According to the Center for Importe, new vehicles withdraws strengthen the costs of cars for consumers.
“At a time when the cost is the number one concern for American car buyers, American car manufacturers are working to provide an affordable range of vehicles to consumers,” said Jennifer Safavian, president and chief executive officer of Autos Drive America, a commercial group representing foreign car manufacturers, in a press release.
“The prices imposed today will make it more expensive to produce and sell cars in the United States, which will ultimately lead to higher prices, fewer options for consumers and fewer manufacturing jobs in the United States.”
COX Automotive, a provider of car services, predicted before the announcement of the new price according to which $ 3,000 would be added to the cost of a vehicle manufactured in the United States and $ 6,000 on a vehicle designed in Canada or Mexico without exemptions.
If the prices pass, in mid-April, Cox expects an interruption in the production of North American vehicles “almost all”, which results in 20,000 less vehicles produced per day, or about 30% of production.