Trump puts 25% tariff on imported cars and trucks, expecting to raise $100 billion in tax money
President Donald Trump speaks in the East Room of the White House, Wednesday, March 26, 2025. (AP Photo/Jacquelyn Martin)
President Trump said today he is putting 25% tariffs on auto imports, expecting to generate $100 billion in tax revenue each year.
The White House says the tariffs will boost domestic manufacturing and encourage foreign automakers to build facilities in the U.S.
The president says plans by Hyundai to build a $5.8 billion steel plant in Louisiana is evidence that tariffs would bring back manufacturing jobs. Trump said that steel will be used at the Hyundai assembly plant in Montgomery as well as the company’s facilities in Georgia. Overall, Hyundai is planning a $20 billion investment in the U.S.
The tariffs could be complicated for U.S. automakers, which get parts from around the world.
The tax hike starting in April means automakers could face higher costs and lower sales, though Trump says the tariffs will lead to the end of what he judges to be a “ridiculous” supply chain in which auto parts and finished vehicles are manufactured across the United States, Canada and Mexico.
Trump said, “This is permanent.”
Trump has long said that tariffs against auto imports would be a defining policy of his presidency, helping to narrow the budget deficit.
We’re looking at much higher vehicle prices,” said economist Mary Lovely, senior fellow at the Peterson Institute for International Economics. “We’re going to see reduced choice. … These kinds of taxes fall more heavily on the middle and working class.’’
The auto tariffs are part of a broader reshaping of global relations by Trump, who plans to impose what he calls “reciprocal” taxes on April 2 that would match the tariffs charged by other nations.
Trump has already placed a 20% tax on all imports from China for its role in the production of fentanyl. He similarly placed 25% tariffs on Mexico and Canada, with a lower 10% tax on Canadian energy products. Parts of the Mexico and Canada tariffs have been suspended, including the taxes on autos, after automakers objected and Trump responded by giving them a 30-day reprieve that is set to expire in April.
The president has also imposed 25% tariffs on all steel and aluminum imports, removing the exemptions from his earlier 2018 taxes on the metals. He also plans tariffs on computer chips, pharmaceutical drugs, lumber and copper.
When the European Union retaliated with plans for a 50% tariff on U.S. spirits, Trump responded by planning a 200% tax on alcoholic beverages from the EU.
Trump also intends to place a 25% tariff on countries that import oil from Venezuela, even though the United States also imports oil from that nation.
Trump’s aides maintain that the tariffs on Canada and Mexico are about stopping illegal immigration and drug smuggling.
The United States last year imported nearly 8 million cars and light trucks worth $244 billion. Mexico, Japan and South Korea were the top sources of foreign vehicles. Imports of auto parts came to more than $197 billion, led by Mexico, Canada and China, according to the Commerce Department.
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