United States President, Donald Trump, has announced a new 25% tariff on all imported cars.
Signing an executive order, Trump stated that the tax would take effect on April 2, a date he referred to as “liberation day.”
The tariffs are scheduled to take effect on April 2, though previous rollouts have faced delays.
The announcement follows the ongoing fallout from the Signalgate security breach in Washington.
Speaking late on Wednesday, President Trump stated that the proposal “Will continue to spur growth. We’ll effectively be charging a 25% tariff.”
However, the tariffs could pose challenges, as even American carmakers rely on global supply chains—potentially increasing their costs and lowering sales.
The announcement drew swift condemnation from the European Union and Canadian Prime Minister Mark Carney, who called it a “direct attack” on Canadian workers.
Trump has often used tariffs as a trade weapon against both allies and rivals.
He pointed to South Korean automaker Hyundai’s plan to build a $5.8 billion (£4.5 billion) steel plant in Louisiana as proof that the tariffs would help revive manufacturing jobs.
Despite his optimism, General Motors shares dropped about 3% in Wednesday afternoon trading.
Ford’s stock saw a slight increase, while Stellantis, the owner of Jeep and Chrysler, saw its shares drop nearly 4%.
Even automakers with U.S. plants depend on Canada, Mexico, and other countries for parts and vehicles, meaning prices could rise and sales could decline as new factories take time to develop.
Trump plans to impose what he calls “reciprocal” taxes on April 2, matching tariffs and sales taxes imposed by other nations.
Tariffs remain a central tool in Trump’s push to reshape global trade relations.
