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Trump to Announce Tariffs on Foreign Cars
d8a347b41db1ddee634e2d67d08798c102ef09ac
By The New York Times
Published 3 weeks ago on
March 26, 2025

Vehicles parked at the Port of Baltimore, in Baltimore, on Feb. 22, 2025. President Donald Trump is expected to announce tariffs on foreign cars on Wednesday, a measure that could bring car factories to the United States but raise prices for consumers. (Erin Schaff/The New York Times)

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President Donald Trump will announce auto tariffs during a news conference Wednesday afternoon, Karoline Leavitt, the White House press secretary, said during a briefing with reporters at the White House.

Details of the tariffs remain unclear, including whether they will apply broadly to all imports of cars and car parts, or be more narrowly tailored.

Stock markets fell on news that the auto tariffs would be implemented, with shares in American automakers declining. The S&P 500 was down more than 1% in early afternoon trading. Most auto stocks were down around 2%.

Tariffs could encourage auto companies to set up more factories in the United States, a primary goal for Trump. But depending on how broadly they are imposed, tariffs could also disrupt supply chains for carmakers, chill their investments and significantly raise costs for consumers.

Measure Could Spark Trade Clashes

The measure could also spark more trade clashes with foreign countries, particularly European nations, Japan and South Korea, whose companies send many cars to the United States.

Trump has argued that tariffs will help revive American manufacturing, but some industry executives and analysts have warned that the measures could backfire. If automakers see the cost of their components go up too much, for example, that could shrink their profits and dissuade them from making new investments. Nearly half of all vehicles sold in the United States are imported, and almost 60% of the parts in vehicles assembled in the United States are imported, according to data from Wall Street research firm Bernstein.

Putting tariffs on foreign cars is an idea that the president has mentioned more frequently in recent weeks, and it would significantly expand the economic impact of his trade moves.

The auto industry is a major employer in the United States but heavily dependent on foreign parts. Car companies have also set up their supply chains to snake across the borders with Canada and Mexico. And cars are often the single biggest purchase for American families, meaning that additional costs from tariffs could weigh heavily on consumers.

Ken Kim, a senior economist at KPMG Economics, said in a note Wednesday that he had seen a “sizable jump” in orders for vehicles and parts in February, as the car industry put in more orders before tariffs on steel and aluminum would come into effect. He cited industry estimates saying that the price of a new vehicle would increase by several thousand dollars — perhaps more than $10,000 — because of tariffs.

Car Tariffs Would Be an Addition to Other Tariffs

The car tariffs would come in addition to other expansive tariffs Trump has introduced in recent months. Since coming into office, Trump has added an additional 20% tariff to all U.S. imports from China. He also imposed a 25% tariff on almost all goods from Canada and Mexico, before exempting roughly half of those imports, which trade under the rules of the North American trade agreement.

Trump plans to introduce more levies April 2, when he has said he will announce “reciprocal tariffs” that match the high tariffs and other trade barriers that other countries impose on American exports.

This article originally appeared in The New York Times.

By Ana Swanson and Jack Ewing/Erin Schaff
c. 2025 The New York Times Company

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