Wedoany.com Report-Feb 17, U.S. President Trump Announces Potential New Tariffs on Automobiles

On Friday, U.S. President Donald Trump announced that he would unveil new tariffs on automobiles, as part of his ongoing effort to reshape global trade relationships and pressure companies to relocate production to the United States. Trump made the announcement while signing executive actions on energy policy in the Oval Office.

The potential tariffs on automobiles come a day after Trump ordered his administration to consider imposing reciprocal tariffs on numerous trading partners, an effort to address what he believes is a system that is tilted against the U.S. The reciprocal levies on nations that have import taxes on U.S. goods could come as soon as April.

The auto threat places some of the biggest brands in Japan, Germany, and South Korea in Trump's crosshairs. Imports accounted for roughly half of the U.S. auto market last year, and significant portions of Volkswagen and Hyundai-Kia's U.S. sales are imported.

However, Trump did not provide any details on the scope or rate of the potential auto levies. It is also unclear how the tariffs would affect vehicles built under the free trade agreement between the U.S., Canada, and Mexico, given the highly integrated auto production supply chains across North America.

The U.S. neighbors, both major trading partners, are already facing a threatened 25% tariff on imports that Trump announced and then paused until March, in a bid to extract concessions from Mexico and Canada over border security. Trump has used tariffs to extract policy concessions from other nations on immigration and the flow of illegal drugs, and he has highlighted tariffs as a tool that will convince companies to move production to the U.S.

It remains to be seen how the potential auto tariffs will impact the global automotive industry and the U.S. economy.