By River Akira Davis, Ana Swanson and Jack Ewing
President Trump said on Wednesday that he would impose a 25 percent tariffs on cars that are imported into the United States.
The tariffs will apply to finished cars and trucks that are shipped into the United States, including American brands whose automobiles are assembled overseas, and could raise prices for consumers significantly. Nearly half of all vehicles sold in the United States are imported.
“This is very exciting,” Mr. Trump said during remarks from the Oval Office. He said he would sign an executive order “that’s going to lead to tremendous growth in the automotive industry.”
The move is aimed at pushing companies to set up more factories into the United States, a primary goal for Mr. Trump. But the tariffs could also disrupt supply chains for carmakers, chill their investments and raise costs for consumers by thousands of dollars.
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.
Here’s what else to know:
- Investor reaction: 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 percent in early afternoon trading. Most auto stocks were down around 2 percent.
- Other tariffs: The car tariffs would come in addition to other expansive tariffs Mr. Trump has introduced in recent months. Since coming into office, Mr. Trump has added an additional 20 percent tariff to all U.S. imports from China. He also imposed a 25 percent tariff on almost all goods from Canada and Mexico, before exempting roughly half of those imports, for the goods that trade under the rules of the North American trade agreement. Mr. Trump plans to introduce further levies on 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.
- Rising costs: 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.
The United States is the biggest market for the Japanese automakers Toyota, Honda, Nissan, Mazda and Subaru. The companies have extensive American production networks but still rely on exports: Of the 2.3 million cars Toyota sold last year in the United States, about one million were made outside the country.
Trade reporter
Trump also says the U.S. will be putting tariffs on imported pharmaceuticals and lumber. He has already begun a trade investigation into lumber, but has yet to do that for pharmaceuticals.
Disclaimer
The information contained in South Florida Reporter is for general information purposes only.
The South Florida Reporter assumes no responsibility for errors or omissions in the contents of the Service.
In no event shall the South Florida Reporter be liable for any special, direct, indirect, consequential, or incidental damages or any damages whatsoever, whether in an action of contract, negligence or other tort, arising out of or in connection with the use of the Service or the contents of the Service. The Company reserves the right to make additions, deletions, or modifications to the contents of the Service at any time without prior notice.
The Company does not warrant that the Service is free of viruses or other harmful components
