Trump announces 25% tariff on imported cars and parts

US President Donald Trump announced that a 25% customs tariff will be applied to cars imported into the US.

Effective from April 2, the taxes also include car parts not produced in the US.

The President stated that the tariffs will be “permanent,” adding that there is nothing that would necessitate the removal of the import taxes.

Trump told reporters, “We will apply a 25% customs duty, but if you produce your car in the US, there is no customs duty. This means that many foreign car companies will be in a very good position because they have already established their facilities in the US.”

In a fact sheet released after Trump’s remarks in the Oval Office, the White House stated that car parts compliant with the US-Mexico-Canada (USMCA) trade agreement would remain exempt from customs duties “until Customs and Border Protection establishes a process to apply customs duties to their content outside the US.”

The US International Trade Commission examined in early 2024 the potential consequences if the government implemented comprehensive automotive tariffs. According to the report, a 25% customs duty applied to all US car imports would reduce imports by approximately 74% and increase average car prices by 5%.

Although President Trump’s increase in customs duties on imported vehicles will primarily affect foreign automakers, domestic automakers General Motors and Ford will also face a significant impact.

According to research by Wards Automotive and Barclays, Volvo (13%), Mazda (19%), and Volkswagen (21%) produce the lowest share of their vehicles sold in the US within the country.

Hyundai-Kia (33%), Mercedes (43%), BMW (48%), and Toyota (48%) also produce less than half of the vehicles they sell in the US domestically.

According to the Department of Transportation, examples of significant 2025 models imported into the US include the Ford Maverick pickup, Chevrolet Blazer crossover, Hyundai Venue crossover, Nissan Sentra compact car, Porsche 911 sports car, and Toyota Prius hybrid.

Approximately 45% of vehicles sold in the US are imported, with the largest share originating from Mexico and Canada.

According to data from the American Automobile Labeling Act, every 2025 model year vehicle sources at least 20% of its content from countries outside the US and Canada.