Trump’s new 25 percent auto tariffs are supposed to start within days, and could soon drive up car prices. Here are the key questions and answers.
President Donald Trump announced the latest in his ongoing volley of tariffs, levying a 25 percent tax on all automobiles and car parts imported into the United States. “I think our automobile industry will flourish like it hasn’t before,” he told reporters in the Oval Office. Though the president’s stated goal is to boost the American auto industry, the average American consumer will probably foot the bill with car prices likely to rise significantly as a result of the tariffs. With the new tax expected to go into effect early next month, here’s a quick rundown of the key questions and answers.
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What will the auto tariffs apply to?
Per Trump, his administration will be enacting a 25 percent tariff on all cars and automobile parts that are imported into the country. According to a White House fact sheet, the new tax will apply to passenger vehicles like sedans, cargo vans, crossovers, SUVs, minivans, and light trucks, as well as pertinent vehicle parts like “engines, transmissions, powertrain parts, and electrical components.”
However, auto parts covered by the United States–Mexico–Canada Agreement (USMCA) won’t be subject to tariffs until the Commerce secretary “establishes a process to apply tariffs to their non-U.S. content.”
The administration has cited the country’s increased reliance on foreign cars, citing a statistic that half of the 16 million cars, light trucks, and SUVs purchased by Americans in 2024 were imports.
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When do the auto tariffs go into effect?
Per Trump’s announcement, the auto tariffs are slated to go into effect on April 2 (with collection beginning April 3) and the auto-part tariffs will go into effect no later than May 3.
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But will they actually go into effect? Hasn’t Trump changed his tune before?
Though the president has levied some tariffs since taking office, there is a chance he could delay implementation of the auto ones. Earlier this month, Trump delayed a series of tariffs on Canadian and Mexican goods covered by the USMCA trade agreement for 30 days following discussions with the nations’ leaders and a tumultuous stock-market response.
However, there also signs that the Trump administration won’t back down again. It is already reveling in its move and signal-boosting the United Auto Workers’ endorsement of the tariffs, which was a notable win for the president as the prominent union previously backed all three of Trump’s Democratic challengers over him. “We applaud the Trump administration for stepping up to end the free trade disaster that has devastated working class communities for decades. Ending the race to the bottom in the auto industry starts with fixing our broken trade deals, and the Trump administration has made history with today’s actions,” UAW president Shawn Fain said in a statement.
