New Delhi: US president Donald Trump has now announced that the US will implement a new 25% tariff on imported cars and light trucks.
According to Trump, these tariffs will be permanent and will take effect on April 2. Duties are expected to be collected starting April 3.
At present, around 50% of the vehicles sold in the US are produced domestically – something the White House aims to strengthen with this effort.
“This will continue to spur growth like you haven’t seen before,” Trump told reporters.
The Trump administration expects the tariffs to generate $100 billion in annual revenue.
There is speculation, however, that because US automakers rely on components from various countries, they may face increased costs and potential declines in sales.
Trump, though, is of the view that the tariffs will lead to more factories opening in the US. He has earlier called the auto parts supply chain from Mexico and Canada “ridiculous”.
The Associated Press reported that shares in General Motors fell roughly 3% in trading on May 26. Ford’s stock was up slightly. Shares in Stellantis, the owner of Jeep and Chrysler, dropped nearly 3.6%.
Economist Mary Lovely, senior fellow at the Peterson Institute for International Economics, told the Associated Press, “These kinds of taxes fall more heavily on the middle and working class.”
European Commission President Ursula von der Leyen has slammed Trump’s decision, “Tariffs are taxes – bad for businesses, worse for consumers equally in the US and the European Union,” she said.
