WASHINGTON: World powers on Thursday blasted US President Donald Trump’s steep tariffs on imported vehicles and parts, vowing retaliation as trade tensions intensify and price hikes appear on the horizon.
Major car exporter Germany urged a firm response from the European Union, while Japan said it “will consider all options”. The 25 per cent US duties take effect starting 12:01 am Washington time (0401 GMT) on April 3 and impact foreign-made cars, light trucks and vehicle parts.
Experts warn of higher vehicle costs, and Italian carmaker Ferrari said it would raise prices on many models sold to the United States by up to 10pc from next week.
Global stock markets plummeted with automakers like Toyota, Hyundai and Mercedes leading the plunge. In New York, shares in General Motors tumbled with Ford and Stellantis also declining.
French Finance Minister Eric Lombard said the only solution for the EU is to “raise tariffs on American products in response”. Canadian Prime Minister Mark Carney said he convened a meeting to discuss trade options, while Mexico’s Economy Minister Marcelo Ebrard seeks “preferential treatment” for his country.
But Trump ramped up his threats overnight, saying on social media that Canada and the EU could face “far larger” tariffs if they worked together “to do economic harm to the USA”.
Price surge
JPMorgan analysts estimate the tariffs on autos and parts could cause a $4,000 to $5,300 increase in average auto prices.
It said 82pc of Ford’s US sales are produced domestically, with the corresponding figures for Stellantis at 71pc and General Motors at 53pc.
The American Automotive Policy Council representing the three automakers warned that the tariffs must be implemented in a way that “avoids raising prices for consumers” and preserves the industry’s competitiveness.
“The steep and broad-based tariffs are likely to cause supply chain disruptions globally,” JPMorgan said in a note.
Canadian Vehicle Manufacturers’ Association president Brian Kingston said the levies would bring higher costs for producers and consumers, alongside “a less competitive industry”. While Trump invoked emergency economic powers for some earlier tariffs, his auto levies build on a government investigation completed in 2019.
‘Cheaters’
About one in two cars sold in the United States are manufactured in the country. Among imports, about half come from Mexico and Canada, with Japan, South Korea and Germany also major suppliers.
Of the US-made cars, their average domestic content is likely around 40pc, the White House said.
In a briefing Wednesday, Trump’s senior counselor Peter Navarro blasted “foreign trade cheaters” who he said turned the US manufacturing sector into a “lower wage assembly operation for foreign parts”. He took aim at Germany and Japan for reserving construction of higher-value parts to their countries.
Since returning to the presidency, Trump has imposed tariffs on imports from major trading partners Canada, Mexico and China -- alongside a 25pc duty on steel and aluminum.
Published in Dawn, March 28th, 2025
