U.S. President Donald Trump on Wednesday announced sweeping 25% tariffs on all foreign-made cars and light trucks, along with duties on auto parts.
The tariffs take effect at 12:01 a.m. (0401 GMT) on April 3 and come ahead of additional targeted trade levies expected next week.

“As of now, any car not made in the United States will face a 25% tariff,” Trump declared while signing the order in the Oval Office.

Trading Partners React Swiftly

The announcement drew sharp criticism from major U.S. allies and trading partners.
Japan’s government called the move “extremely regrettable,” and Prime Minister Shigeru Ishiba confirmed that Tokyo was “considering all kinds of countermeasures.”

Canadian Prime Minister Mark Carney described the tariffs as a “direct attack” on Canadian workers and said his cabinet would meet Thursday to finalize a response.

White House Pushes Back Against Criticism

Peter Navarro, Trump’s senior counselor on trade and manufacturing, defended the move.
He accused foreign trade “cheaters” of turning America into a “low-wage assembly line” for imported parts.
Navarro singled out Germany and Japan for offshoring high-value parts manufacturing while relying on U.S. assembly plants.

Automakers and Markets React

The global auto market reacted immediately.
In Japan, shares of car manufacturers tumbled:

• Toyota fell 3.5%

• Nissan dropped 2.5%

• Honda lost 3.1%

• Mitsubishi Motors slid 4.5%

• Mazda sank 5.9%

• Subaru plunged 6.1%

In South Korea, Hyundai dropped 2.7%.
On Wall Street, General Motors slid 3.1%, while Ford barely gained, up just 0.1%.

USMCA Countries May See Some Relief

Cars entering under the US-Mexico-Canada Agreement (USMCA) may qualify for lower tariffs depending on American content.
USMCA-compliant parts will remain duty-free as U.S. officials establish a process to trace non-U.S. content.

Still, experts warn that the new measures may strain relationships with close allies like Mexico, Canada, South Korea, and Germany.

Consumer Prices and Jobs on the Line

Wendy Cutler, Vice President at the Asia Society Policy Institute, warned of a “devastating impact” on global trade.
She said imposing tariffs on long-time trade partners undermines the value of U.S. trade commitments.

The Center for Automotive Research estimates the combined tariffs on autos and metals could raise car prices by thousands of dollars and hurt auto industry jobs.

The American Automotive Policy Council, representing Ford, GM, and Stellantis, cautiously welcomed the tariffs but urged caution.
“It is critical that tariffs are implemented in a way that avoids raising prices for consumers,” it stated.

‘Liberation Day’ and Sector-Specific Targets Coming

Trump has dubbed April 2 as “Liberation Day” for the U.S. economy and promised more tariffs, tailored to specific countries and sectors.
Upcoming targets include pharmaceuticals, semiconductors, and lumber.

While Trump has used emergency powers for previous trade actions, these auto tariffs stem from a 2019 national security investigation.
The probe concluded that excessive imports were hurting the U.S. economy and national security.