Trump to impose 25% tariff on all automobiles brought into the U.S.
By Rob Wile, NBC News
WASHINGTON (NBC News) -- President Donald Trump said Wednesday he was imposing a 25% tariff on all autos coming into the U.S, as of April 2nd.
Trump said he expects auto firms to relocate to the U.S. and build new sites, or expand existing ones. He hit out at companies that have in recent decades opened facilities in Canada and Mexico at what he said were the expense of U.S. workers.
"If you build your car in the U.S., there's no tariff," Trump said.
Shares of the top U.S. automakers fell sharply in after-hours trading on the announcement. Ford Motor shares dropped 2%, General Motors tumbled 2.3% and Jeep owner Stellantis declined 3%.
No autos driven in the U.S. have parts made solely in America. Most of the vehicles that have 50% or more of their parts from suppliers in the U.S. or Canada — until recently, considered the equivalent of American-made — are either built by Tesla, or by foreign brands with U.S. assembly plants: Honda, Hyundai, Kia, Nissan, Mazda, Subaru and Toyota.
Thought it is assembled in the U.S., the parts that go into making the Ford F-150 are less than 50% American-made.
Mexico remains the largest source of U.S. auto imports, accounting for approximately 14% of all cars purchased in the United States, followed by Japan, South Korea, the European Union and Canada.
The new duties come a week ahead of Trump's planned "Liberation Day" on April 2, when he has promised to roll out a bevy of new tariffs against many of America's largest trading partners, including long-time allies, that will affect a broad range of goods. Trump had hinted in recent days that a separate statement on auto tariffs could come ahead of next week.
Previously, Trump indicated he was receptive to pleas from U.S. automakers that tariffs would harm their businesses. He gave them a one-month reprieve from duties on Canada and Mexico that ultimately evolved into indefinitely waiving the levies for all items covered by the U.S.-Mexico-Canada free-trade agreement.
Trump's on-again, off-again announcements have roiled markets in recent weeks while ratcheting up uncertainty in the economy. That has led to declining business and consumer confidence.
While some economic indicators have suggested the American economy remains in solid shape, the Commerce Department reported Tuesday that orders for business equipment placed with U.S. factories unexpectedly declined 0.3% last month, the first drop since October.
Meanwhile, S&P Global reported this week that U.S. manufacturing activity slipped back into contraction territory, thanks to a rise in materials costs related to tariffs, while the outlook for the services sector deteriorate
