In a move to protect and improve the United States automotive industry, president Donald Trump has announced new import taxes of 25% on cars and car parts. The fresh tariffs on foreign-made cars will take effect on April 3, 2025 at 12.01am ET, while the levy on car parts is set to take effect “no later than May 3.”
According to a fact sheet posted by the White House, the 25% tariff will be applied to imported passenger vehicles, which include sedans, SUVs, crossovers, minivans and cargo vans. Light trucks aren’t left out either and are subject to the same tax.
The United States–Mexico–Canada Agreement (USMCA) was also mentioned, where by importers of the cars under the free trade treaty will be given the opportunity to certify their US content. “Systems will be implemented such that the 25% tariff will only apply to the value of their non-US content,” read the fact sheet.
“USMCA-compliant automobile parts will remain tariff-free until the secretary of commerce, in consultation with US customs and border protection (CBP), establishes a process to apply tariffs to their non-US content, it continued.
Engines, transmissions, powertrain parts and electrical components were listed as car parts that will be taxed, with “processes to expand tariffs on additional parts if necessary.”
CNN reports that because of the USMCA, automakers treated Canada, Mexico and the US as one big country, with no tariffs among them. “Frankly, friend has been oftentimes much worse than foe. And 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, it’s absolutely no tariff,” Trump told reporters.
Following Trump’s announcement, Canada prime minister Mark Carney said the tariffs were a “direct attack” in violation of the USMCA and options will be examined for a response, including possible retaliatory tariffs. European Commission president Ursula von der Leyen also condemned the tariffs and said the European Union will wait to announce any retaliatory actions.
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