Trump places 25% tariff on imported autos, expecting to raise $100 billion in tax revenues

Boston Globe

26-03-2025

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To underscore his seriousness, Trump said, 'This is permanent.'
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Shares in General Motors fell roughly 3 percent in Wednesday trading. Ford's stock was up slightly. Shares in Stellantis, the owner of Jeep and Chrysler, dropped nearly 3.6 percent.
Trump has long said that tariffs against auto imports would be
"We're looking at much higher vehicle prices,' said economist Mary Lovely, senior fellow at the Peterson Institute for International Economics. 'We're going to see reduced choice. ... These kinds of taxes fall more heavily on the middle and working class.''
She said more households will be priced out of the new car market — where prices already average about $49,000 — and will have to hang on to aging vehicles.
The tariffs on autos would start being collected on April 3, Trump said. If the taxes are fully passed onto consumers, the average auto price could jump by $12,500, a sum that could feed into overall inflation. Trump returned to the White House after losing the 2020 election in large part because voters believed he could bring down prices.
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As Trump announced the new tariffs, he indicated that he would like to provide a new incentive to help car buyers by allowing them to deduct from their federal income taxes the interest paid on auto loans, so long as their vehicles were made in America. That deduction would eat into some of the revenues that could be generated by the tariffs.
The auto tariffs are part of a broader reshaping of global relations by Trump, who plans to impose what he calls
Trump has already placed a 20 percent import tax on all imports from China for its role in the production of fentanyl. He similarly placed 25 percent tariffs on Mexico and Canada, with a lower 10 percent tax on Canadian energy products. Parts of the Mexico and Canada tariffs have been suspended, including the taxes on autos, after automakers objected and Trump responded by giving them
The president has also imposed 25 percent tariffs on all steel and aluminum imports, removing the exemptions from his earlier 2018 taxes on the metals. He also plans tariffs on computer chips, pharmaceutical drugs, lumber, and copper.
His taxes risk igniting a broader global trade war with escalating retaliations that could crush global trade, potentially hurting economic growth while raising prices for families and businesses as some of the costs of the taxes get passed along by importers. When the European Union retaliated with plans for
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Trump also intends to place a 25 percent tariff on countries that
Trump's aides maintain that the
The president on Monday cited plans by South Korean automaker Hyundai to build a $5.8 billion steel plant in Louisiana as evidence that tariffs would bring back manufacturing jobs.
Slightly more than one million people are employed domestically in the manufacturing of motor vehicles and parts, about 320,000 fewer than in 2000, according to the Bureau of Labor Statistics. Another 2.1 million people work at auto and parts dealerships.
The United States last year imported nearly 8 million cars and light trucks worth $244 billion. Mexico, Japan, and South Korea were the top sources of foreign vehicles. Imports of auto parts came to more than $197 billion, led by Mexico, Canada, and China, according to the Commerce Department.