President Donald Trump has intensified the trade conflict by announcing a new 25 percent tariff on certain vehicle imports.
On March 26, the 47th President of the United States disclosed a new tariff set to take effect on April 2, which he labeled as ‘the beginning of Liberation Day in America’.
The tariff imposes a 25 percent duty on ‘automobiles and certain automobile parts’ imported into the U.S.
A fact sheet from the White House describes the proclamation as addressing ‘a critical threat to US national security’. It states that Trump is ‘taking action to protect America’s automobile industry, which is vital to national security and has been undermined by excessive imports threatening America’s domestic industrial base and supply chains’.
The White House elaborates: “The 25 percent tariff will be applied to imported passenger vehicles (sedans, SUVs, crossovers, minivans, cargo vans) and light trucks, as well as key automobile parts (engines, transmissions, powertrain parts, and electrical components), with processes to expand tariffs on additional parts if necessary.
“Importers of automobiles under the United States-Mexico-Canada Agreement will be given the opportunity to certify their U.S. content and systems will be implemented such that the 25 percent tariff will only apply to the value of their non-US content.”
Trump added, “But if you build your car in the US, there is no tariff.”
Though the president has previously delayed the implementation of other tariffs due to pre-existing trade agreements, he asserts that the tariffs on imported vehicles will be ‘100 percent permanent’.
Peter Navarro, a trade advisor at the White House, remarked: “The foreign trade cheaters have turned America into a lower-wage assembly operation for foreign parts that threatens our national security because it’s eroded our defense and manufacturing industrial base.
“Half of the roughly 16 million cars, SUVs and light trucks Americans bought in 2024 were imports – that’s 50 percent. Of the remaining eight million units, more than half of these cars were assembled from foreign parts. So what that means is less than 25 percent of the cars sold in America contain US content on average. That stops right now with the Trump auto tariffs.”
The tariffs are intended to ‘strengthen the US economy’, with Trump describing it as ‘a very simple system’.
He further elaborated, “And the beauty of the 25 – it’s one number […] And that number is going to be used to reduce debt greatly in the United States and to build things and reduce taxes. Basically, I view it as reducing taxes and also reducing debt.”
The Canadian Chamber of Commerce issued a statement saying: “The consequences of today’s escalation in this destructive tariff war will not be contained to Canada, as much as the U.S. administration would like to pretend.
“Throwing away tens of thousands of jobs on both sides of the border will mean giving up North America’s auto leadership role, instead encouraging companies to build and hire anywhere else but here. This tax hike puts plants and workers at risk for generations, if not forever.”