Texas Border Business
Texas Border Business
President Donald Trump has signed a proclamation imposing a 25% tariff on all automobile imports not manufactured in the United States, a dramatic increase from the current 2.5% base tariff. “What we’re going to be doing is a 25% tariff on all cars that are not made in the United States. If they’re made in the United States, it’s absolutely no tariff,” Trump stated during the announcement.
The move is already drawing strong reactions from automakers and international trade observers. According to Bloomberg’s Jon Herskovitz, the impact is expected to ripple across the global auto industry. “There are very few winners in this now in terms of the car companies,” he said. Major automakers such as Volkswagen and the Hyundai-Kia group are expected to be among the hardest hit due to their significant import volume to the U.S. market. However, even American automakers could feel the sting, as many import certain vehicle models or essential components from abroad.
Herskovitz noted that even companies with significant manufacturing presence in the U.S., such as Toyota, could suffer due to tariffs on imported parts. “Toyota employs tens of thousands of people and has plants in the U.S., but some of the things they bring in to make cars could be hit by tariffs and hurt their production,” he explained. Consumers are unlikely to escape the effects either. “Some studies indicate that the cost of cars could go up by several thousand dollars,” Herskovitz said, a worrying prospect given the already fragile state of U.S. consumer confidence.
On the international front, reactions to the tariff announcement are still developing. While countries like the UK and Mexico have refrained from immediate retaliation, others signal potential pushback. “The EU is considering it. Japan’s Prime Minister Ishiba said that some sort of reaction is not off the table. South Korea is holding a meeting today,” Herskovitz reported. Canada, recalling its swift response to prior steel and aluminum tariffs, will likely weigh similar action. “These are countries that are some of the U.S.‘s closest partners and traditional allies. They’re going to be hit the most by these tariffs,” he added.
Beyond the auto industry, Herskovitz warned that other sectors may also be in the crosshairs. “There are some being looked at, including lumber, pharmaceutical drugs, and semiconductors,” he said. Additionally, a broader set of reciprocal tariffs will be announced on April 2, potentially escalating global trade tensions even further.
