• Economics
• United States

March 27, 2025, 5:50 PM View Comments ()

U.S. President Donald Trump announced 25 percent tariffs on imported automobiles on Wednesday, to begin on April 3. While the White House expects to raise $100 billion in revenue annually by promoting domestic car manufacturing, economists fear that the latest trade war escalation will strain global supply chains and hike inflation.

If Trump’s taxes are fully passed onto consumers and not swallowed by carmakers, then the average price for imported vehicles could skyrocket by $12,500. However, a partial exemption will be given to vehicles and car parts that comply with the U.S.-Mexico-Canada Agreement’s rules of origin—but only for what is produced in the United States.

Auto tariffs are just the latest in a slew of White House duties aimed at virtually all of Washington’s trade partners. Already, the Trump administration has imposed:

• 20 percent tariffs on Chinese imports, on top of 25 percent duties already in place, though Trump on Wednesday said he would consider reducing these levies if Beijing approves the sale of TikTok’s operations to a U.S. company;
• 25 percent tariffs on Mexican and Canadian imports, with a lower 10 percent tax on Canadian energy;
• and 25 percent tariffs on all steel and aluminum imports.

That is not including the sweeping “reciprocal” tariffs that the United States will impose on April 2, the day before auto levies go into effect; impending 25 percent tariffs on all goods from countries that import oil from Venezuela, even though the United States is one of those countries; a threatened 200 percent tariff on alcoholic beverages from the European Union; and expected duties on computer chips, pharmaceuticals, lumber, and copper.

Read more in today’s World Brief: Trump’s Proposed Auto Tariffs Plunge Wall Street, Foreign Markets Into Turmoil.