Permanent tax increase! Trump threatens: Dare to unite, tariffs will be increased!

On March 26, local time in the United States, President Trump issued an executive order at the White House, deciding to impose a 25% tariff on all imported cars. This decision will officially take effect on April 2.

Former President Trump decided to impose a 25% tariff on imported cars and certain auto parts under Section 232 of the Trade Expansion Act of 1962, citing national security concerns. Trump accused foreign companies and governments of harming the U.S. auto industry and threatening the domestic industrial base and supply chain.

The tariff measures cover all major trading partners, including traditional allies of the United States, and partially overturn the signed US-Mexico-Canada Agreement (USMCA). According to the new policy, imported components from Mexico and Canada that meet USMCA standards will be temporarily exempt from tariffs, but the proportion of American-made parts will determine the tariff level. If the proportion reaches half of the vehicle's value, the tariff will be reduced from 25% to 12.5%.

Trump stated that the auto tariffs signify the "return of American business," which will drive the automotive industry to thrive, promote the transfer of production to the U.S., increase government revenue, and reduce the national debt. However, most analysts believe that this will lead to shutdowns in U.S. auto production, price increases, and heightened tensions with allies.

Research institutions predict that tariffs will increase the cost of cars in the United States by thousands of dollars, reduce import volumes, and drive up domestic prices. The Michigan Automobile Industry Association and trade groups have expressed concerns that tariffs will lead to rising consumer prices, a reduction in model availability, and the shutdown of production lines. The U.S. Chamber of Commerce stated that tariffs would harm the U.S. auto industry, jeopardize jobs, and lead to deindustrialization. Automotive service providers predict that the cost of cars manufactured in the U.S. and North America will rise significantly, with expectations that North American auto production will be nearly completely halted by mid-April.

Trump threatens: Dare to join forces, tariffs will increase!

According to reports from AFP and other media, U.S. President Trump issued a statement on social media on the 27th, warning the European Union and Canada. He claimed that if the two joined forces to harm the U.S. economy, the U.S. would impose large-scale tariffs far exceeding the current plans on them.

On the 26th, in response to Trump's executive order to impose a 25% tariff on imported cars starting April 2, Canadian Prime Minister Carney stated that this tariff measure is a "direct blow" to Canadian workers and indicated that Canada would study corresponding countermeasures, which may include retaliatory tariffs. European Commission President von der Leyen also expressed regret over this decision on social media that day, pointing out that the tariff "is detrimental to both American and European businesses, and adds to the burden on consumers."

Affect the global automotive industry?

In 2024, data shows that the United States imported approximately 8 million cars, with the trade value of passenger vehicles reaching $214 billion, accounting for half of all U.S. car sales. The total value of automotive imports reached $474 billion, and 60% of the components for domestically manufactured cars rely on imports. In 2024, the main countries exporting cars to the U.S. were Mexico (2.5 million), South Korea (1.4 million), Japan (1.3 million), Canada (1.1 million), Germany (430,000), and the United Kingdom (90,000).

Trump's automobile tariff policy was quickly condemned by various trade partners and automobile industry associations. European Commission President Ursula von der Leyen, Canadian Prime Minister Justin Trudeau, Japanese Prime Minister Shigeru Ishiba, South Korean Minister of Trade, Industry and Energy Ahn Duk-geun, and Brazilian President Lula all expressed concerns about the tariffs and planned to take countermeasures.

The president of the German Automobile Industry Association, Müller, pointed out that Trump's tariff policy is an attack on free trade, which will impose a heavy burden on the global automotive supply chain and businesses, and affect consumer interests. The German Institute for Economic Research predicts that this policy will harm the economies of Mexico, Canada, and Germany, while raising inflation rates in the United States.