Donald Trump imposes new tariffs on car imports worth $100 billion dollars

On March 26 2025 Donald Trump announced an ambitious plan to impose tariffs of 25 percent on all vehicles imported into the United States This significant decree aims to generate a staggering 100 billion dollars in revenue for the US amidst ongoing tensions in the global automotive industry

Mr Trump characterised the move as a step towards American economic independence declaring that it is time to charge foreign countries for “taking our jobs and wealth over the years” The new tariffs primarily target non-US manufactured vehicles which could severely affect the UK and European car markets The implications for Britain’s automotive sector are particularly troubling with the potential loss of over 8 billion pounds in passenger vehicle sales according to Commerce Department figures

Despite ongoing discussions between UK officials and their US counterparts there is a palpable sense of concern among European manufacturers The Society of Motor Manufacturers and Traders representing the UK automotive industry expressed their disappointment over the tariffs emphasising the historic productive relationship between UK and US carmakers

The announcement has sent tremors across the stock market prompting a noticeable decline in shares of American manufacturers including Tesla and General Motors Investors are wary of the potential disruptions to international supply chains which often involve multiple cross-border movements of car parts Indeed the imposition of tariffs could escalate production costs significantly affecting manufacturers

Mr Trump’s policy comes on the heels of a temporary exemption granted to the automotive sector concerning imports from Canada and Mexico This exemption aimed to alleviate immediate pressures on American car manufacturers but is set to expire soon with the impending tariffs poised to reshape the industry

The economic fallout from these tariffs could be severe with experts warning that retaliation from trading partners might ensue The Office for Budget Responsibility in the UK has projected that the trade war could substantially reduce growth prospects with potential GDP losses of 1 percent or more by 2026 Should the tariffs escalate further the economic ramifications for both the US and European markets are likely to be profound