President Trump on Wednesday signed an executive order imposing a 25% tariff on cars and auto parts not manufactured in the United States. The tariffs take effect April 2 and will be permanent, Trump said.
“If you build your car in the United States, there is no tariff,” Trump told reporters, encouraging foreign automakers with U.S.-based plants. Parts compliant with the USMCA trade deal will remain tariff-free until Customs and Border Protection finalizes a process to assess tariffs on their non-U.S. content.
A recent U.S. International Trade Commission study found a 25% tariff would reduce auto imports by 74% and raise average vehicle prices by 5%. About 45% of light vehicles sold in the U.S. are imported.
United Auto Workers President Shawn Fain praised the move as a win for American workers. However, Canadian business leaders and officials warned of long-term economic damage, with Ontario Premier Doug Ford vowing retaliatory tariffs.
The announcement coincides with a broader set of reciprocal tariffs also expected on April 2.
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