by President Trump announced the introduction of a 25% duty on all cars that are not manufactured in the USA.
This could bring up to $100 billion, and the costs will likely be passed on to consumers.
Trump also announced plans to make interest on car loan deductions tax-deductible.
President Trump is escalating the trade war, and millions of people may pay the price as he announced a 25% duty on all cars not made in the United States. This marks a significant increase, as it appears to apply not only domestically but globally.
In his speech today, he said that this move will support growth and bring back automotive jobs that have been sent to other countries. He also stated that consumers will be able to buy cars with gasoline, electric, hybrid, or any other engine types they choose.
Additional information on how the duties will be applied was released by the White House. According to the official statement, the 25% duty will target imported passenger cars – including sedans, SUVs, crossovers, minivans, trucks, light trucks – and key automotive parts such as engines, transmissions, suspension parts, and electronic components. The government also noted that procedures will be introduced to expand duties to additional parts if necessary.
Exact details are still being determined, but we can expect more information on April 2nd. Trump also noted that cars made in America will have ‘absolutely no tariffs.’ However, he hinted at the possibility of linking tariffs to the foreign content of parts.
‘If the parts are made in America, but the car is not, those parts will not be taxed or tariffed, and we will strictly enforce this,’ Trump said in response to a press question. ‘In most cases, I believe this will lead to the production of vehicles on a single platform. Right now, a car will be made here, sent to Canada, sent to Mexico, sent everywhere – it’s absurd. So it’s a very simple system.’
After the press conference, the White House clarified that automakers importing cars under the United States-Mexico-Canada Agreement (USMCA) will have the option to certify US-made content. It was stated that systems ‘will be implemented so that the 25% tariff will only apply to the value of their non-American content’ in these cars. However, cars and parts will remain duty-free until these procedures are fully implemented.
Although prices could sharply increase as soon as next week, the President confirmed his intent to allow Americans to deduct interest on car loans. This will apply to cars made in America, but details are practically unknown. However, it is believed that it will work like the mortgage interest deduction.
