Trump says he doesn't care if automakers raise prices because of tariffs
On March 29, local time, US President Trump said in an interview that he "doesn't care" about automakers raising prices because of tariffs.
Trump also said he wants automakers to raise prices because if they do, people will buy American-made cars.
On March 26, local time, US President Donald Trump signed an executive order at the White House, announcing the imposition of an additional 25% tariff on all imported cars, and relevant measures will take effect on April 2.
Currently, the United States imposes a 2.5 percent tariff on passenger cars and a 25 percent tariff on commercial vehicles, which will increase to 27.5 percent and 50 percent, respectively.
Mr. Trump said the auto tariffs would be permanent. He said there would be no tariffs if cars were made in the United States.
Mr. Trump also said that Elon Musk, the chief executive of Tesla, had not offered any advice on auto tariffs or asked for any benefit from them.
In addition, core components, including engines, transmissions and powertrains, are also on Trump's tariff list. According to the White House, these imported parts will also be subject to an additional 25% tariff in the future. The exact timing of the tariffs on components has not yet been determined, but it is certain that they will take effect no later than May 3.
Despite Trump's claim that the tariffs will bring "tremendous growth" to the U.S. auto industry, analysts believe they will lead to the temporary suspension of large amounts of U.S. auto production, higher prices and increased tensions with Allies.
Tesla CEO Elon Musk also said on social media that day, "It is important to note that Tesla is not unscathed. The impact of tariffs on Tesla is still significant."
Data from consulting firm Bernstein and the US Department of Commerce show that in 2024, the US will import about 8 million vehicles, and the total trade in passenger vehicles will reach $214 billion, accounting for about half of total US auto sales, and the total trade in all auto imports will reach $474 billion. Even for cars made in the United States, 60 percent of their parts are imported.
According to public data, in 2024, the major car importers to the United States are Mexico (2.5 million vehicles), South Korea (1.4 million vehicles), Japan (1.3 million vehicles), Canada (1.1 million vehicles), Germany (430,000 vehicles) and the United Kingdom (90,000 vehicles).
Trump's auto tariffs drew immediate condemnation from major trading partners and auto industry associations.
European Commission President Ursula von der Leyen said on social media: "Deeply regrets the decision of the United States to impose tariffs on European car exports. "Tariffs are bad news for businesses and even worse news for consumers, both in the United States and the European Union."
Calling the move a "direct attack on the Canadian auto industry," Canadian Prime Minister Mark Carney announced a C $2 billion ($1.4 billion) "strategic response fund" to boost local supply chain competitiveness and protect jobs.
Trump responded on social media: "If the European Union, along with Canada, causes economic damage to the United States, both countries will be subject to high tariffs, much higher than previously planned."
Japanese Prime Minister Shigeru Ishiba also said that the Japanese government will consider corresponding measures in response.
"The Korean auto industry will face considerable difficulties after the tariffs take effect, and the government plans to take emergency measures in April," said Undergun, Minister of Trade, Industry and Energy.
Brazilian President Luiz Inacio Lula da Silva said: "Brazil cannot sit idly by with tariff measures. We will choose what we think is right for Brazil."
Hildegard Mueller, president of the German Automotive Industry Association, said in a statement that Trump's auto tariffs "send a fatal signal for free and rules-based trade," are a heavy burden for businesses and the tightly intertwined global auto supply chain, and will have a negative impact on consumers in particular, including those in North America.
The German Institute for the World Economy predicts that without taking into account retaliatory measures, Trump's auto tariffs will cause the gross domestic product of Mexico and Canada to shrink by 1.8 percent and 0.6 percent, and the economic output of traditional auto powerhouse Germany will shrink by 0.18 percent. Domestic inflation would rise by 1%.
On March 28, Ding Shuang, chief economist for Greater China and North Asia at Standard Chartered Bank, said that the impact of this round of tariffs on China is relatively small, because the United States has accumulated a 20% tariff on China, and overall, China's tariffs on the United States have been significantly lower than the United States' tariffs on China. Therefore, if you look at it from the perspective of "reciprocal tariffs", "the United States should cut taxes on China."
Specifically to the auto industry, Ding Shuang said that the United States has imposed 100% tariffs on Chinese electric vehicles, so the United States this round of 25% tariffs on imported cars will not have much impact on China. As for other industries, the United States also imposes tariffs of more than 25% on most Chinese products.
Jeffrey Sachs, a professor at Columbia University in the United States, said at the Boao Forum for Asia 2025 Annual Conference that "the United States announced tariffs on automobiles, making the U.S. auto industry permanently uncompetitive." In the auto industry, the U.S. will not be able to compete with China."
Trump also said he wants automakers to raise prices because if they do, people will buy American-made cars.
On March 26, local time, US President Donald Trump signed an executive order at the White House, announcing the imposition of an additional 25% tariff on all imported cars, and relevant measures will take effect on April 2.
Currently, the United States imposes a 2.5 percent tariff on passenger cars and a 25 percent tariff on commercial vehicles, which will increase to 27.5 percent and 50 percent, respectively.
Mr. Trump said the auto tariffs would be permanent. He said there would be no tariffs if cars were made in the United States.
Mr. Trump also said that Elon Musk, the chief executive of Tesla, had not offered any advice on auto tariffs or asked for any benefit from them.
In addition, core components, including engines, transmissions and powertrains, are also on Trump's tariff list. According to the White House, these imported parts will also be subject to an additional 25% tariff in the future. The exact timing of the tariffs on components has not yet been determined, but it is certain that they will take effect no later than May 3.
Despite Trump's claim that the tariffs will bring "tremendous growth" to the U.S. auto industry, analysts believe they will lead to the temporary suspension of large amounts of U.S. auto production, higher prices and increased tensions with Allies.
Tesla CEO Elon Musk also said on social media that day, "It is important to note that Tesla is not unscathed. The impact of tariffs on Tesla is still significant."
Data from consulting firm Bernstein and the US Department of Commerce show that in 2024, the US will import about 8 million vehicles, and the total trade in passenger vehicles will reach $214 billion, accounting for about half of total US auto sales, and the total trade in all auto imports will reach $474 billion. Even for cars made in the United States, 60 percent of their parts are imported.
According to public data, in 2024, the major car importers to the United States are Mexico (2.5 million vehicles), South Korea (1.4 million vehicles), Japan (1.3 million vehicles), Canada (1.1 million vehicles), Germany (430,000 vehicles) and the United Kingdom (90,000 vehicles).
Trump's auto tariffs drew immediate condemnation from major trading partners and auto industry associations.
European Commission President Ursula von der Leyen said on social media: "Deeply regrets the decision of the United States to impose tariffs on European car exports. "Tariffs are bad news for businesses and even worse news for consumers, both in the United States and the European Union."
Calling the move a "direct attack on the Canadian auto industry," Canadian Prime Minister Mark Carney announced a C $2 billion ($1.4 billion) "strategic response fund" to boost local supply chain competitiveness and protect jobs.
Trump responded on social media: "If the European Union, along with Canada, causes economic damage to the United States, both countries will be subject to high tariffs, much higher than previously planned."
Japanese Prime Minister Shigeru Ishiba also said that the Japanese government will consider corresponding measures in response.
"The Korean auto industry will face considerable difficulties after the tariffs take effect, and the government plans to take emergency measures in April," said Undergun, Minister of Trade, Industry and Energy.
Brazilian President Luiz Inacio Lula da Silva said: "Brazil cannot sit idly by with tariff measures. We will choose what we think is right for Brazil."
Hildegard Mueller, president of the German Automotive Industry Association, said in a statement that Trump's auto tariffs "send a fatal signal for free and rules-based trade," are a heavy burden for businesses and the tightly intertwined global auto supply chain, and will have a negative impact on consumers in particular, including those in North America.
The German Institute for the World Economy predicts that without taking into account retaliatory measures, Trump's auto tariffs will cause the gross domestic product of Mexico and Canada to shrink by 1.8 percent and 0.6 percent, and the economic output of traditional auto powerhouse Germany will shrink by 0.18 percent. Domestic inflation would rise by 1%.
On March 28, Ding Shuang, chief economist for Greater China and North Asia at Standard Chartered Bank, said that the impact of this round of tariffs on China is relatively small, because the United States has accumulated a 20% tariff on China, and overall, China's tariffs on the United States have been significantly lower than the United States' tariffs on China. Therefore, if you look at it from the perspective of "reciprocal tariffs", "the United States should cut taxes on China."
Specifically to the auto industry, Ding Shuang said that the United States has imposed 100% tariffs on Chinese electric vehicles, so the United States this round of 25% tariffs on imported cars will not have much impact on China. As for other industries, the United States also imposes tariffs of more than 25% on most Chinese products.
Jeffrey Sachs, a professor at Columbia University in the United States, said at the Boao Forum for Asia 2025 Annual Conference that "the United States announced tariffs on automobiles, making the U.S. auto industry permanently uncompetitive." In the auto industry, the U.S. will not be able to compete with China."
