In a major policy move, U.S. President Donald Trump has announced a 25% tariff on all imported vehicles, a decision he called “very exciting” for domestic manufacturing. The tariff will take effect on April 2 and will impact nearly half of all vehicles sold in the United States, including American brands produced overseas.
The policy aims to encourage automakers to shift production to U.S. factories. However, industry experts warn of serious consequences. Autos Drive America, a group representing international car manufacturers in the U.S., expressed concerns about rising costs.
“The tariffs will make car production more expensive, potentially leading to higher prices for consumers, reduced consumer choices, and potential job market disruptions,” the group stated.
The move could also increase trade tensions with major car-exporting nations such as Japan, South Korea, and European countries. These nations may see the tariffs as a direct threat to their automotive industries. Economists predict that vehicle prices could rise by thousands of dollars, adding pressure on consumers already dealing with inflation.
Despite the concerns, President Trump defended the policy, saying, “Anybody who has plants in the United States, it’s going to be good for.”
This decision could also impact India, as Trump previously criticized India’s high auto import tariffs. In a speech to Congress, he said, “India charges us auto tariffs higher than 100%,” and vowed to impose a reciprocal tax from April 2.
As the global automotive industry adjusts to this major shift, manufacturers are bracing for potential changes in production, pricing, and trade relations.