US Tariffs on Imported Vehicles Take Effect Amid Global Market Volatility
Steep tariffs of 25% on vehicles imported into the United States went into effect early Thursday morning, as international leaders reacted to and markets reeled from President Donald Trump’s announcement of even more sweeping tariffs set to begin later this week and next week.
The auto tariffs apply to imported cars, SUVs, minivans, cargo vans, and light trucks, potentially raising car prices by thousands of dollars according to experts. About half of the approximately 16 million vehicles purchased in the U.S. last year were imported, according to the White House.
The White House justified the tariffs as a means of safeguarding U.S. national security and economic strength, claiming that the U.S. auto industry had been undermined by excessive imports. Experts warn that U.S. shoppers will likely face higher prices for foreign cars as the increased tariffs are passed on to consumers, potentially affecting used vehicle prices as well.
Additional tariffs of 25% on key imported auto parts, including engines and electrical components, were slated to go into effect later. This move follows Trump’s announcement of a wide-ranging tariff plan that includes a baseline tax on imports from all trading partners, as well as steeper tariffs on countries that impose levies on U.S. goods.
Under the plan, goods imported from China will face “kind reciprocal” tariffs of 34%, while goods from the European Union will be hit with 20% tariffs. Experts from the Cato Institute noted that these tariffs approach levels not seen since the Smoot-Hawley Tariff Act of 1930, which historians say exacerbated the nation’s economic downturn during the Great Depression.
International leaders have strongly criticized Trump’s announcement. China urged the U.S. to cancel its unilateral tariff measures, while the European Union stated it has a “strong plan to retaliate.” Italian Prime Minister Giorgia Meloni called the tariffs “wrong” and emphasized the need to avoid a trade war that could weaken the West.
The trade maneuvers have strained relations with Canada and Mexico, key U.S. allies and neighbors, although they are not included in the list of countries set to be hit with reciprocal tariffs. Mexico said it will respond later this week.
The stock market reacted negatively to Trump’s announcement, with the Dow Jones Industrial Average falling by 1,100 points or 2.7%. S&P 500 futures lost 3.9% and Nasdaq-100 futures tumbled 4.7%.
