Trump Administration To Impose 25 Percent Tariffs On All Auto Imports

On March 26, President Donald Trump used his Section 232 trade powers to impose 25 percent tariffs on all imports of automobiles into the United States. The penalties will take effect April 2, 2025. The president argued this new policy would foster domestic manufacturing and would raise $100 billion in revenue for the U.S. Department of the Treasury annually.

According to a White House fact sheet:

• The 25 percent penalty will be applied to imported passenger vehicles — sedans, SUVs, crossovers, minivans, cargo vans — along with light trucks and key automobile parts, including engines, transmissions, powertrain parts, and electrical components. The order also includes processes to expand the tariffs to additional parts if the administration deems that move necessary.
• Importers of automobiles under the United States-Mexico-Canada Agreement (USMCA) will have the opportunity to certify that their U.S. content and systems will be implemented so that the 25 percent tariff will only apply to the value of their non-U.S. content.
• USMCA-compliant automobile parts will remain tariff-free until the U.S. secretary of Commerce, in consultation with U.S. Customs and Border Protection, establishes a process to apply tariffs to their non-U.S. content.

The White House noted that, in 2024, Americans bought approximately 16 million cars, SUVs, and light trucks, and about half of these vehicles were imported from other countries. Additionally, the White House said that of the other eight million vehicles assembled in the United and not imported, the average domestic content of those vehicles is conservatively estimated at only 50 percent, but is likely closer to 40 percent.