US President Donald Trump has announced that he will impose a 25% tariff on all vehicles not made in the United States starting from next week.
"What we're going to be doing is a 25% tariff on all cars that are not made in the United States. If they're made in the United States, it is absolutely no tariff," he announced at the White House.
Mr Trump said that the tariffs will come into effect on 2 April and the US will begin collecting the revenue from them the next day, 3 April.
"We start off with a 2.5% base, which is what we're at, and go to 25%," he added.
Mr Trump has long promised higher duties on imported cars, and the timing of the announcement suggests that they would coincide with his 2 April plans for reciprocal tariffs aimed at the countries responsible for the bulk of the US trade deficit.
Mr Trump, who sees tariffs as a tool to raise revenue to offset his promised tax cuts and to revive a long-declining US industrial base, has for weeks promised to announce those levies, and possibly some additional sectoral tariffs, on 2 April.
The US President also said that the tariffs on vehicles not made in the United States will be permanent, and that there will be "strong policing" to ensure compliance.
However, the tariffs will not be applied if vehicle parts are made in the US, but the vehicle itself is not.
A Trump administration official claimed that the tariffs will bring in more than $100 billion (€93bn) in new annual revenue.
Mr Trump also said that the reciprocal tariffs he is expected to unveil on next week will be "very lenient" and impact all countries.
"We're going to make it all countries, and we're going to make it very lenient. I think people are going to be very surprised."
European Commission President Ursula von der Leyen said on X, formerly Twitter, that she "deeply regretted" the US decision to impose the tariffs.
"Tariffs are taxes - bad for businesses, worse for consumers, in the US and the EU. The EU will continue to seek negotiated solutions, while safeguarding its economic interests.
"As a major trading power and a strong community of 27 member states, we will jointly protect our workers, businesses and consumers across our European Union," she added.
Canadian Prime Minister Mark Carney said the tariffs are a direct attack on Canadian workers.
Speaking to reporters in Ontario, Mr Carney said he would be convening a high-level meeting of cabinet ministers tomorrow to discuss trade options and said the federal government has put in place a large facility for affected companies to draw on for liquidity, if needed.
Tariffs could drive costs of cars higher for consumers by thousands of dollars, hitting new vehicle sales and resulting in job losses, since the US automotive industry relies heavily on imported parts, according to the US Center for Automotive Research.
The US imported $474 billion worth of automotive products in 2024, including passenger cars worth $220 billion.
Mexico, Japan, South Korea, Canada and Germany, all close US allies, were the biggest suppliers.
