Auto industry braces for chaos as Trump sets 25% tariff on all imports

Yesterday afternoon, once the markets were closed and could no longer react immediately, US President Donald Trump announced that starting on April 2, all imported automobiles and many imported car parts will now be subject to an extra 25 percent tariff. Despite Trump's rhetoric during his election campaign and since taking office, tariffs are paid for by those importing the goods, not the exporters, so we can look forward to most new cars and trucks—and their maintenance costs—getting a lot more expensive.

During his first term in office, Trump started trade wars with key US trading partners like Canada, the European Union, and China. Upon his return in 2025, more trade wars have been the name of the game. A 25 percent tariff on all imports from Canada and Mexico was threatened and then implemented at the beginning of March, before being partially reversed just two days later. Additionally, a 10 percent tariff on Chinese exports was also levied.

Less than two weeks later, a new 25 percent tariff on all steel and aluminum imports also joined the club.

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