According to Xinhua News Agency, Beijing, March 27, US President Trump signed a document at the White House on the 26th, imposing a 25% tariff on cars imported into the US market, and the relevant measures will take effect on April 2.
This move triggered a drop in the stock prices of US automakers. US allies responded quickly: Canada sought to retaliate against the “direct attack” from the United States; the European Union pointed out that the US tariff measures “harmed others and hurt itself.”
Trump told the media on the afternoon of the 26th that a 25% tariff would be imposed on all non-US-made cars. The relevant measures will take effect on April 2 and will be implemented on April 3.
The White House website released a document on the same day saying that Trump cited Section 232 of the Trade Expansion Act of 1962 to impose a 25% tariff on imported cars and certain auto parts, saying that this move was to protect “national security.”
The document shows that the 25% tariff will apply to imported sedans, sports utility vehicles (SUVs) and other passenger cars and light trucks, as well as key auto parts such as engines and transmissions, and will expand tariffs on other parts when necessary.
The document said that under the framework of the USMCA, auto importers will have the opportunity to certify their U.S.-made content, and a corresponding mechanism will be established to ensure that the 25% tariff will only apply to the value of non-U.S.-made parts.
According to Trump, the tariff increase will prompt more production to move to the United States, create new revenue for the government, and help reduce the national debt. But economists believe that this move will push up car prices and hurt consumers who are already facing high prices.
Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics and a former Treasury official, told Xinhua News Agency that Trump’s latest tariff policy is a “major blow” to the auto industry, and the increase in car costs will suppress demand, especially because consumers are in a weak financial situation. He expects “massive layoffs” in U.S. auto and parts companies.
U.S. media also quoted Mary Lovely, an economist at the Peterson Institute for International Economics, as saying that the average price of a car in the U.S. new car market has reached about $49,000, and Trump’s tariff policy will force more people to give up buying new cars. “We’ve seen car prices go up a lot, and there will be fewer choices in the future… The burden on the middle class and workers will be heavier.”
General Motors shares fell about 3% in afternoon trading, while Stellantis Group, which owns the Jeep and Chrysler brands, fell 3.6%.
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