Trump places 25% tariff on imported autos, expecting to raise $100 billion in tax revenues

President Trump imposes 25% tariffs on auto imports to boost domestic manufacturing, potentially impacting automakers and global supply chains.

U.S. President Donald Trump said Wednesday (March 26, 2025) he was placing 25% tariffs on auto imports, a move that 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,” Mr. Trump told reporters. “We'll effectively be charging a 25% tariff.”

The tariffs could be complicated as even U.S. automakers source their components from around the world, meaning that they could face higher costs and lower sales. Shares in General Motors have fallen roughly 3% in Wednesday (March 26, 2025) afternoon trading. Ford's stock was up slightly. Shares in Stellantis, the owner of Jeep and Chrysler, have dropped nearly 4%.

Mr. Trump has long said that tariffs against auto imports would be a defining policy of his presidency, betting that the costs created by the taxes would cause more production to relocate to the United States. But U.S. and foreign automakers with domestic plants still depend on Canada, Mexico and other nations for parts and finished vehicles, meaning that auto prices could increase and sales could decline as new factories take time to build.

“We are going to be doing automobiles, which you’ve known about for a long time,” Mr. Trump said Monday (March 24, 2025). “We’ll be announcing that fairly soon, over the next few days probably.”

The auto tariffs are part of a broader reshaping of global relations by Mr. Trump, who plans to impose what he calls “reciprocal” taxes on April 2 that would match the tariffs, sales taxes charged by other nations.

Mr. Trump has already placed a 20% import tax on all imports from China for its role in the production of fentanyl. He similarly placed 25% tariffs on Mexico and Canada, with a lower 10% tax on Canadian energy products. Parts of the Mexico and Canada tariffs have been suspended, including the taxes on autos, after automakers objected and Mr. Trump responded by giving them a 30-day reprieve that is set to expire in April 2025.