Trump Imposes 25% Tariffs on Non-US-Made Cars

President Donald Trump announced Wednesday that he will impose a 25% tariff on all cars "not made in the United States," effective April 2, CNBC reports.

Trump, speaking in the Oval Office where he signed the presidential proclamation authorizing the tariffs, clarified that cars built in the US will be exempt.

"There is absolutely no tariff" for US-made cars, he stated.

The new tariffs, which will generate "over $100 billion of new annual revenue" for the US, will apply to "foreign-made cars and light trucks," according to White House aide Will Scharf. Importantly, these tariffs are in addition to existing duties.

Trump emphasized that there will be "very strong policing" to determine which components of a car warrant tariffs.

The announcement prompted swift criticism from European Commission President Ursula von der Leyen, who condemned the new tariffs as harmful to businesses and consumers on both sides of the Atlantic.

"Tariffs are taxes – bad for businesses, worse for consumers equally in the US and the European Union," she stated in a statement.

Auto stocks experienced significant declines in after-hours trading following Trump's announcement. General Motors, Stellantis, and Ford Motor all lost approximately 5% in extended trading.

This move follows a one-month exemption granted to the "Big Three" automakers from Trump's 25% tariffs on Mexico and Canada for vehicles complying with the USMCA trade deal.

Trump's unpredictable tariff strategy has generated considerable uncertainty in the stock market and among business leaders, who struggle to plan for the future.

His "reciprocal tariff" plan, originally slated to launch on April 2, aimed to impose tariffs on countries with import duties on US goods and those engaging in other unfavorable trade practices, such as using value-added taxes.

However, Trump and his officials have hinted at a potentially softer approach than initially envisioned. Trump suggested "flexibility" in the tariffs, while Treasury Secretary Scott Bessent indicated that countries could pre-negotiate with the US to avoid new tariffs on April 2.