Trump will place a 25% tariff on cars not made in the United States

President Donald Trump announced new 25% tariffs on the auto industry. “What we’re going to be doing is a 25% tariff on all cars that are not made in the United States,” Trump said from the Oval Office, noting that cars produced by foreign companies in the U.S. would not be subject to the new barrier taxes.

Trump said the auto tariffs would go into effect on April 2 and that the federal government would start collecting fees on April 3. The president specifically commended a number of foreign automakers, including Honda, for announcing that they would be expanding their American production facilities in the face of his tariff agenda.

“In all cases, they wouldn’t have done it without what we’re doing,” Trump said. “Others will come into our country and build, and they’re already looking for sites.” Trump has implemented a growing list of tariffs on individual trading partners and specific sectors.

That list includes 25% taxes on Canada and Mexico, 25% tariffs on all steel, aluminum, and their downstream products, and non-trade-related tariffs on countries such as Venezuela and Iran.

The President has repeatedly told reporters that he will place new “reciprocal” tariffs on all trading partners maintaining tariffs on imports from the U.S. on April 2, dubbing the date “Liberation Day,” and hinted at additional sector-specific tariffs on goods such as cars, pharmaceuticals, copper, and lumber.

“I think our automobile business will flourish like it’s never flourished before,” Trump said. The United Auto Workers union praised the move, saying it could mean more shifts for workers at plants with spare capacity.

U.S. tariffs are paid to the government by businesses in the U.S. that are importing goods. Studies of tariffs imposed in Trump’s first term have shown they were overwhelmingly paid by U.S. businesses and consumers.

White House officials have said that foreign companies will lower their prices to compensate for tariffs, essentially eating the cost. Mr Trump is taking measures to help car manufacturers in the United States, and respond to what he sees as unfair trade practices by other countries.

Like with most things President Trump does, whether this will turn out positive or negative remains to be seen. Mr Trump thrives on keeping everyone guessing and upending orthodoxy, and his latest action on tariffs is no different.