President Donald Trump has escalated his economic warfare, signing a proclamation imposing a 25% tariff on imported automobiles. The move is the latest salvo in his quest to bring manufacturing jobs back to American soil while setting the stage for even broader tax measures scheduled for next week.
“We’re going to impose a 25% tariff on all cars not made in the United States,” Trump proudly declared at the White House on Wednesday. “We’re going to tax countries doing business here and encroaching on our jobs, our wealth, and many things they’ve been robbing from us for years.”
The proclamation, published later on Wednesday, specifies that the automobile tariffs will be enforced on April 3rd. And if that’s not enough, the tariffs will hit fully-assembled vehicles and essential car parts, including engines, transmissions, powertrain components, and electrical systems. Parts tariffs are expected to kick in by May 3rd, and the list will likely grow over time to include even more elements.

In Trump’s view, these tariffs are “permanent,” and he’s not interested in discussing exemptions. The White House was quick to clarify that importers covered under the USMCA, the trade deal Trump negotiated during his first term with Canada and Mexico, will have the “opportunity to certify their American content, and systems will be in place so that the 25% tariff only applies to the value of their non-American content.”
According to White House Secretary Will Scharf, the tariffs are projected to generate a staggering $100 billion new annual revenue for the United States. As usual, Trump is playing the tough guy in trade negotiations, threatening even higher tariffs to ensure America comes out on top.
This grandiose move comes right before the announcement scheduled for April 2nd when Trump plans to unveil even broader reciprocal tariffs to level the playing field against foreign countries’ trade barriers and reduce the American trade deficit. Of course, Trump’s plans include the possibility of granting exemptions or reductions for “well-behaved” trading partners.
But wait, there’s more! Trump is also itching to slap tariffs on lumber, semiconductors, and pharmaceutical drugs.

The tariffs are set to hit some of the biggest car manufacturers in countries like Japan, Germany, and South Korea – all major U.S. trading partners. The move risks disrupting the operations of North American automakers, who rely heavily on deeply integrated supply chains spread across the U.S., Mexico, and Canada.
Even the most iconic and profitable Detroit models won’t be spared. GM imports some Chevrolet Silverado pickups from Mexico and Canada, while Stellantis manufactures models like the Jeep Compass in Mexico. And despite Ford’s relatively more substantial U.S. production base, it won’t come out unscathed. Its popular Maverick pickup and Bronco Sport SUV are both produced in Mexico.

European Commission President Ursula von der Leyen called the U.S. decision “regrettable” and made the usual diplomatic noises about evaluating the announcement and pursuing “negotiated solutions.”
Canadian Prime Minister Mark Carney wasn’t quite as diplomatic, calling Trump’s tariffs a “direct attack” on Canadian autoworkers and violating the USMCA. Yet, in typical Canadian fashion, he opted for calm consultation with his cabinet before announcing any retaliatory measures.
Doug Ford, Premier of Ontario – the heart of Canada’s auto industry – took a more combative approach, insisting that Canada should target American-made cars in retaliation. “We’re going to make sure to inflict as much pain as possible on the American people without hurting our own,” he declared with remarkable frankness.
Meanwhile, Japanese Prime Minister Shigeru Ishiba hinted at possible countermeasures, stating, “We need to consider appropriate responses, and of course, all options are on the table.”

And what about the consumers? Oh, they’ll have to pay more, of course. Analysts predict the new tariffs could increase the price of new vehicles by thousands of dollars per unit. A recent study estimated that tariffs imposed on Canada, Mexico, and China could increase the production cost of a crossover vehicle by around $4,000. In comparison, a U.S.-made electric vehicle would cost roughly $12,000 more.
Trump, meanwhile, keeps hammering away at the narrative that his tariffs are working.
But let’s not forget the glaring contradiction in Trump’s approach. The tariffs punishing foreign automakers will also affect U.S.-made vehicles if their supply chains rely on low-cost countries. And given Trump’s unpredictable trade policy, markets and corporate executives are left scrambling to understand it all.
Yes, Trump may call it “Liberation Day,” but it’s becoming more like the Day of Reckoning for many businesses and consumers.