The following is a report from The Associated Press.
President Donald Trump said he was placing 25% tariffs on auto imports, a move the White House claims would foster domestic manufacturing but could also put a financial squeeze on automakers that depend on global supply chains.
“This will continue to spur growth,” Trump told reporters Wednesday. “We’ll effectively be charging a 25% tariff.”
The tariffs, which the White House expects to raise $100 billion in revenue annually, could be complicated as even U.S. automakers source their components from around the world. The tax hike starting in April means automakers could face higher costs and lower sales, though Trump argues that the tariffs will lead to more factories opening in the United States and the end of what he judges to be a “ridiculous” supply chain in which auto parts and finished vehicles are manufactured across the United States, Canada and Mexico.
To underscore his seriousness about the tariffs directive he signed, Trump said, “This is permanent.”
The Republican president reiterated his willingness to challenge allies by saying Thursday on social media that if the European Union coordinated with Canada, tariffs “far larger than currently planned” would be placed on them in retaliation.
Shares in General Motors tumbled roughly 5% in Thursday morning trading. Ford’s stock fell 2%. Shares in Stellantis, the owner of Jeep and Chrysler, dropped 1%. But the stock prices of electric vehicle makers Tesla and Rivian were up.
The American Automotive Policy Council, which represents domestic automakers, said in a statement that “it is critical that tariffs are implemented in a way that avoids raising prices for consumers and that preserves the competitiveness of the integrated North American automotive sector,” which depends on the U.S.-Mexico-Canada trade deal negotiated during Trump’s first term.
The group’s president, former Republican Gov. Matt Blunt of Missouri, said in an email response to questions from The Associated Press that “we have clearly expressed concerns related to prices and other impacts to the administration as well as our belief that a modernized” North American trade agreement should remain in place.
Trump has long said that tariffs against auto imports would be a defining policy of his presidency, betting that the costs created by the taxes would cause more production to relocate to the United States while helping narrow the budget deficit. But U.S. and foreign automakers have plants around the world to accommodate global sales while maintaining competitive prices — and it could take years for companies to design, build and open the new factories that Trump is promising.
Click here to read the full report by Josh Boak at The Associated Press.
