*Global automobile industry leaders and economists say US President Donald Trump’s 25 percent tariff on all imported cars and trucks, effective from April 2, 2025, could lead to significant price increases, limited vehicle choices, and job losses across the industry in the American country

Gbenga Kayode | 绿帽献妻

As the United States (US) President Donald Trump administration’s 25 percent tariff on all imported cars and trucks, including US brands assembled overseas took effect April 2, 2025, economists have warned vehicle prices could go up as much as $10,000.

绿帽献妻 gathered the auto tariffs came against the backdrop of a series of protectionist moves by the Trump administration, and might be followed by additional barriers.

Industry groups and economists, however, warned of price hikes, supply chain disruptions, and job losses.

President Trump is imposing a sweeping 25 percent tariff on all cars and trucks imported into the American country, a move aimed at pressuring automakers to bring more manufacturing back to American soil, agency report said.

Therefore, as the new tariffs became effective April 2, the tariff regime would also apply to American brands that build vehicles abroad, and then ship them back to the US for sale.

Trump said from the Oval Office, that “anybody who has plants in the United States, it鈥檚 going to be good for ….”, calling the move 鈥渧ery exciting,鈥� according to report.

However, auto industry leaders and economists said the tariffs could lead to significant price increases, limited vehicle choices, and job losses across the auto sector.

Nearly half of all vehicles sold in the US are imported, meaning the measure could raise prices for millions of consumers 鈥� some estimates suggest by as much as $10,000 per vehicle.

Industry pushback

Autos Drive America, which represents the US operations of international automakers, condemned the tariffs, calling them “a direct hit” to both consumers and workers, report stated.

Reacting to the market development, the group in a statement said:

鈥淭he tariffs imposed today will make it more expensive to produce and sell cars in the United States.

鈥淯ltimately leading to higher prices, fewer options for consumers, and fewer manufacturing jobs in the US.鈥�

Ken Kim, senior economist at KPMG Economics, noted a 鈥渟izable jump鈥� in vehicle and parts orders ahead of the tariff rollout, as automakers scrambled to stockpile materials.

He warned that the long-term effect could see vehicle prices soar by thousands of dollars.

Increasing trade tensions among global automobile manufacturers

It is noted that the US President’s move also risks inflaming trade tensions, particularly with major automotive exporters, such as Japan, South Korea, and European countries, who could retaliate with their own tariffs on American-made goods.

Investors react

Meanwhile, investors have reacted negatively to the news.

Report indicated the S&P 500 fell over 1 percent by early afternoon days ago, with most auto stocks down roughly 2 percent. Shares of American automakers, many of which rely heavily on global supply chains, also declined, report noted.

It is recalled the Trump administration recently slammed a 20 percent tariff on all Chinese imports.

A 25 percent tariff on most goods from Canada and Mexico, though some goods were later exempted under North American trade rules, according to report.

Planned 鈥渞eciprocal tariffs鈥� to match foreign trade barriers, set to be announced April 2.

As the White House insists the policy will strengthen domestic manufacturing in the US, critics have argued the move could weaken the very industry it aims to protect after all.

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