President Donald Trump said on Wednesday he will place import tariffs of 25% on all vehicles imported into the U.S.
The tariffs will go into effect April 2 and will apply to finished vehicles that are shipped into the country, including American brands whose vehicles are assembled outside the U.S.
The current tariff on vehicles imported into the U.S. is 2.5%.
“What we’re going to be doing is a 25% tariff for all cars that are not made in the United States,” Trump said at a news conference from the White House. “We start off with a 2.5% base, which is what we’re at, and go to 25%.”
The latest tariffs are an escalation of the Trump administration’s use of aggressive trade measures in an effort to boost domestic manufacturing in the U.S.
“If you build your car in the U.S., there is no tariff. That means a lot of companies will be in great shape because they’ve already built their plants,” Trump said. “I think our automobile businesses will flourish like it’s never flourished.”
In 2024, the U.S. imported $219.49 billion worth of cars, a 4% year-over-year increase from 2023, according to trade data platform US Import Data.
Mexico was the top source of imported vehicles to the U.S. in 2024 at $49.98 billion, followed by Japan ($40.76 billion), South Korea ($38 billion), Canada ($28.4 billion) and Germany ($25.59 billion).
Auto industry experts said the tariffs could drive up prices of new cars significantly.
Auto services provider Cox Automotive said on Wednesday vehicles imported from Mexico and Canada could see cost increases of $6,000 if the 25% tariffs are implemented next week, according to Reuters.
About 44% of new vehicles sold in the U.S. are imported, Cox Automotive said.
