President Donald Trump has added a new tariff to the various fees he plans to impose on foreign goods next week. This one is on auto manufacturers that build cars outside the United States.
The White House says the 25% tariff on cars and trucks would apply only to the parts of those vehicles that were manufactured outside the U.S. So, for example, if 40% of the parts of the car were manufactured in the U.S., only the 60% of the car built abroad would be tariffed.
But that tariff is set to start the same week as the 25% across-the-board tariff on Mexican and Canadian goods. That means the tariffs could be layered on top of each other to produce an even higher import fee on cars and trucks manufactured in Mexico, said Inu Manak, a fellow for trade policy at the Council on Foreign Relations.
“I think it’s pretty clear that the president aims to stack all the tariffs on top of each other,” Manak said.
Many cars, trucks and SUVs cross the border multiple times before they’re ready to be sold to U.S. consumers, so the tariffs are a blow to the Big Three U.S. auto manufacturers — Ford, General Motors and Stellantis — that all have plants abroad. In Hermosillo, about three hours south of the Arizona border, a Ford stamping and assembly plant employs almost three thousand people and builds Bronco Sports and Mavericks.
There are plants like that throughout Mexico, employing many more thousands of workers in the country. Mexican President Claudia Sheinbaum has suggested that she will impose retaliatory tariffs if Trump’s tariffs on Mexico go into effect next week, but said during her daily morning press conference Thursday that she would wait until next week to announce Mexico’s official response.
“We are always going to protect Mexico,” Sheinbaum said.
25% car tariffs may hurt only the consumers, this Arizona car dealer says
The Trump administration announced 25% tariffs on imports of cars and auto parts.
Tim Hovik, the owner of San Tan Ford in Gilbert, says that will raise costs, and may only harm consumers.
"There’s no industry anywhere in the world that gets 100% of their components for a product from within their own country. We’re a global economy. To try and roll back the clock to the ‘60s or the ‘50s, I just don’t see how that makes a lot of sense," Hovik said.
He also says vehicles could see up to $8,000 in additional costs.
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