US Businesses Struggle Amid Trump's Unpredictable Tariff Policies
	Understanding Trump's Tariffs in Five Charts

What Does the New Tariff Entail?

On March 26, US President Donald Trump announced a plan to impose a 25% import tariff on “all cars not manufactured in the US,” which is ten times higher than the current rate. The new tariff will take effect on April 3.

Cars parked at the port in San Diego, California (US) on March 26. (Photo: Reuters)

“What we’re going to be doing is a 25% tariff for all cars that are not made in the US,” Trump said in the Oval Office. “We start off with a 2.5% base, which is what we’re at, and go to 25%.”

The 25% tariff will also apply to key imported auto components, including engines and engine parts, transmissions, drivetrain components, and electrical parts. However, tariffs on auto components may be implemented up to one month later. The White House expects this policy to boost domestic production and generate approximately US $100 billion in revenue for the US.

Currently, many cars are assembled using parts manufactured in multiple countries. According to Trump, if car parts and components are produced in the US, they will not be subject to the new tax.

Speaking from the White House, the President emphasized that the 25% tariff would have no exemptions.

Rising Trade Tensions

Mexico, Canada, Japan, and the Republic of Korea are currently the largest exporters of automobiles to the US. In response to the new US policy, Canada immediately criticized Trump’s tariff announcement, arguing that such measures would harm the auto industry and escalate global trade tensions.

Canadian Prime Minister Mark Carney called it a "direct attack" on Canadian workers.

"President Trump has announced a 25% tariff on our auto industry. This is a direct attack, let me be clear, a direct attack on the very workers of Canada," Carney said, adding that Canada may soon impose retaliatory tariffs on US imports.

Japanese Prime Minister Shigeru Ishiba stated that Tokyo would "put all options on the table" in response to Washington’s announcement of a 25% tariff on imported cars.

“Japan is a country that is making the largest amount of investment to the United States, so we wonder if it makes sense for (Washington) to apply uniform tariffs to all countries. That is a point we’ve been making and will continue to do so,” Ishiba told parliament.

On the evening of March 26, European Commission President Ursula von der Leyen condemned the tariff measures, stating they would negatively impact businesses and, even worse, consumers in both the U.S. and the European Union (EU).

"The automotive industry is a driving force for innovation, competitiveness, and high-quality jobs, with deeply integrated supply chains on both sides of the Atlantic. We will stand together to protect workers, businesses, and consumers across the EU," von der Leyen declared.

Understanding Trump's Tariffs in Five Charts Data shows import taxes could broadly affect US industries from medicine to machinery.

Timeline of Trump 2.0 Trade Policy At the beginning of his second term, President Donald Trump implemented a series of new trade policies to adjust the economic balance and serve the ...