U.S. President Donald Trump announced on Wednesday that the United States will impose a 25% tariff on all cars not made domestically, with the measure set to be permanent. The decision immediately impacted the stock market, with shares of General Motors (GM) and Ford (F) falling in extended trading, while Tesla (TSLA) initially dropped before recovering after Trump suggested the tariffs could be neutral for the electric vehicle maker.
Trump’s move marks a significant escalation in his administration’s protectionist trade policies, aimed at boosting domestic manufacturing and reducing reliance on foreign-made automobiles. The announcement comes as part of broader efforts to reshape global trade relationships and strengthen American industry.
Industry analysts believe the tariffs could lead to higher vehicle prices for consumers and increased costs for automakers relying on global supply chains. Chuck Carlson, CEO of Horizon Investment Services, noted that while the policy may have “some legs,” exemptions or modifications for U.S. automakers could be introduced to mitigate potential disruptions.
The tariffs are expected to have a profound impact on foreign automakers exporting to the U.S., including European and Asian manufacturers. Experts anticipate retaliatory measures from affected countries, which could further strain international trade relations.
The automotive industry will be closely watching for further developments, including potential legal challenges or negotiations that could modify the tariff’s scope. Meanwhile, American consumers may soon face higher costs on imported vehicles as the policy takes effect.
