Trump Enacts Broad 25% Tariff on All Vehicles and Parts Not Made in the US | Carscoops

      The tariffs are set to take effect on April 2 and may lead to a significant increase in prices.

      15 hours ago

      by Michael Gauthier

      President Trump has declared a 25% tariff on all vehicles not manufactured in the USA.

      This could generate $100 billion, and the costs are expected to be passed on to consumers.

      Trump also revealed plans to make interest payments on car loans tax-deductible.

      President Trump is intensifying his trade conflict, which could have financial repercussions for millions, with the announcement of a 25% tariff on all vehicles not produced in the United States. This represents a major development as it appears to apply not only to Canada and Mexico but also on a global scale.

      In his speech today, Trump stated that the initiative would promote growth and revive automotive jobs that have relocated to other nations. He added that consumers would have the choice to purchase gasoline, electric, hybrid, or other types of vehicles they prefer.

      More: Hyundai Investing $21 Billion In The US To Avoid Trump’s Tariffs

      Trump further claimed that the automotive sector will "thrive like it never has before." However, consumers are expected to bear the burden since the tariffs are anticipated to yield $100 billion in new revenue. Contrary to what the administration insists, foreign nations do not absorb these costs; companies do, and they will likely pass the increased expenses onto consumers.

      The White House has provided additional details regarding the implementation of the tariffs. An official statement indicates that the 25% tariff will focus on imported passenger vehicles, including sedans, SUVs, crossovers, minivans, cargo vans, light trucks, as well as essential automobile parts like engines, transmissions, powertrain components, and electrical parts. The administration also mentioned that there would be measures to extend tariffs to more parts if needed.

      The specific details are yet to be determined, but we anticipate further information by April 2. Trump also stated that vehicles produced in America would incur "absolutely no tariff." Nonetheless, he hinted that tariffs may be linked to the content of foreign parts.

      “If parts are made in America and the car isn’t, those parts won’t be taxed or tariffed, and we’ll have very rigorous enforcement on that,” Trump responded to a reporter's question. “For the most part, I believe this will result in cars being manufactured in a single location. Currently, a car is made here, sent to Canada, sent to Mexico, and shipped everywhere—it’s absurd. So, this is a straightforward system.”

      More: Canada Halts Musk’s $43M Tesla EV Rebate Claim After Rapid Sales, Prohibits Future Subsidies

      Following the press conference, the White House clarified that automakers importing vehicles under the United States-Mexico-Canada Agreement (USMCA) would have the opportunity to verify their U.S. content. They stated that the systems "will be designed such that the 25% tariff will only apply to the value of their non-U.S. content" in those vehicles. However, vehicles and parts will remain exempt from tariffs until these processes are fully established.

      While prices may surge as early as next week, the President reiterated his plan to permit Americans to deduct interest on car loans. This would apply to vehicles manufactured in America, but specific details remain scarce. It was previously thought this would function similarly to the mortgage interest deduction.