Trump announces new 25 percent tariff on all cars made outside the U.S.

Danielle Kurtzleben | March 26, 2025

President Trump announces tariffs on auto imports in the Oval Office of the White House in Washington on Wednesday. Since returning to the presidency in January, Trump has already imposed tariffs on imports from major US trading partners Canada, Mexico and China -- as well as a 25 percent duty on steel and aluminum imports. The move is set to fuel tensions with trading partners ahead of further promised levies next week.

President Trump signed an executive order imposing 25% tariffs on imported cars on Wednesday.

“I think our automobile business will flourish like it’s never flourished before,” Trump said in remarks from the Oval Office.

The latest policy is yet another example of the president’s tariff-centric second-term economic agenda. Thus far, Trump has imposed tariffs on Chinese goods, steel and aluminum, and on some goods from Canada and Mexico. Trump also plans a wave of what he calls “reciprocal tariffs” to start April 2, which he has called “Liberation Day.” The taxes on imports have caused plummeting stock markets and consumer confidence, and have left businesses and consumers uncertain about what they want to invest in.

The Trump administration has given multiple rationales for these tariffs, but they have emphasized boosting manufacturing as the chief goal.

U.S. tariffs are paid to the government by businesses in the U.S. that are importing goods. Studies of tariffs imposed in Trump’s first term have shown they were overwhelmingly paid by U.S. businesses and consumers. White House officials have said that foreign companies will lower their prices to compensate for tariffs, essentially eating the cost. However, when asked by NPR, the officials provided no data to support this.

Trump’s tariff policy has been chaotic throughout this presidency. In addition to the tariffs already imposed, he has threatened still more tariffs on a range of goods from around the world, at times announcing a tariff only to then delay or retract it.

Earlier this week, Trump floated what he called a “secondary tariff” of 25 percent on goods from any country buying oil or gas from Venezuela.

The president has said he will also impose “reciprocal tariffs”, which he has described as being equal to tariffs other countries impose on U.S. goods. However, the White House has given few specific details on what those reciprocal tariffs will look like. The latest automobile tariffs go into effect April 3 according to Trump.