US President Donald Trump on Wednesday said he was placing 25 per cent tariffs on auto imports, a move the White House claims would foster domestic manufacturing but could also put a financial squeeze on automakers that depend on global supply chains.
“This will continue to spur growth. We’ll effectively be charging a 25 per cent tariff,” Trump told reporters.
The tariffs, which the White House expects to raise USD 100 billion in revenue annually, could be complicated as even US automakers source their components from around the world.
The tax hike starting April means automakers could face higher costs and lower sales, though Trump argues that the tariffs will lead to more factories opening in the United States and the end of what he judges to be a “ridiculous” supply chain in which auto parts and finished vehicles are manufactured across the United States, Canada and Mexico.
To underscore his seriousness about the tariffs directive he signed, Trump said, “This is permanent.”
Shares in General Motors fell roughly 3 per cent in Wednesday trading. Ford’s stock was up slightly. Shares in Stellantis, the owner of Jeep and Chrysler, dropped nearly 3.6 per cent.