WEBDESK: U.S. President Donald Trump has announced a 25% tariff on all foreign-built cars and auto parts. The decision, which aims to boost American manufacturing, could have a major impact on global automakers and car prices in the U.S.
The new tariff is expected to generate around $100 billion in tax revenue. However, critics argue that it could lead to higher car prices for American consumers. Many international car manufacturers, including Toyota, Honda, Nissan, Hyundai, and Volkswagen, have already seen a drop in their stock prices following the announcement. U.S. automakers, including General Motors and Ford, also experienced declines, while Tesla was less affected due to its limited reliance on foreign-made parts.
Japan’s government described the announcement as “extremely regrettable,” while Prime Minister Shigeru Ishiba said Tokyo was “considering all kinds of countermeasures.”
“What we’re going to be doing is a 25 per cent tariff on all cars that are not made in the United States,” Trump said, as he signed the order in the Oval Office.
Donald Trump has defended the move, stating that it will protect American jobs and reduce dependence on foreign manufacturing. He also proposed allowing tax deductions on interest for auto loans on American-made vehicles to help offset the impact of rising prices.
The decision has sparked concerns among global trade partners. Canada and the European Union have expressed opposition, warning that the tariffs could lead to trade tensions.
Brazil’s President Luiz Inacio Lula da Silva said his country “cannot stand still” in response to the levies.
The move even appeared to raise eyebrows from Donald Trump’s ally and Tesla boss Elon Musk, who said the cost impact of the tariffs on his firm’s cars was “not trivial”.
Despite these concerns, Donald Trump remains firm on his stance, emphasising his commitment to reshaping trade policies. His tariffs on foreign-made vehicles align with his broader strategy of bringing manufacturing back to the U.S. and reducing reliance on imports.
With the new tariffs set to take effect soon, automakers and consumers are closely watching how this decision will impact car prices and the economy. Whether this move strengthens American manufacturing or leads to increased costs remains to be seen.
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