Trump plans to impose 25% tariff on autos

Feb 20, 2025, 08:13 am

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U.S. President Donald Trump holds a news conference at his resort in Mar-a-Lago, Florida, on Feb. 18, 2025./ Source: AP, Yonhap News

Washington correspondent Ha Man-joo

U.S. President Donald Trump said on Tuesday that he plans to impose 25% tariffs on auto imports as well as semiconductors and pharmaceuticals shipped to the United States as early as April 2.

For the plan to impose auto tariffs, he told reporters at his resort in Mar-a-Lago, Florida that it would be about 25% or more. “It’ll go substantially higher over a course of a year,” he said. But he added that he wanted to give time for potentially affected companies to set up production facilities in America to avoid tariffs. “We want to give them a little bit of a chance,” he said.

President Trump has long argued that U.S. automobiles receive unfair treatment in overseas markets. The European Union, for instance, imposes a 10% tariff on imported vehicles, which is four times the 2.5% tariff that the U.S. applies on imported cars. However, the U.S. imposes a high 25% tariff on highly profitable pickup trucks.

If 25% tariffs are imposed on automobiles, it is expected to have widespread repercussions across the industry. Last year, about 8 million passenger cars and light trucks were imported into the U.S., accounting for half of the vehicle sales in the country. Bloomberg predicted that European and Asian automakers, including Volkswagen and Hyundai Motors, would be hit the hardest.

These measures could act as a boomerang for U.S. consumers, leading to increased consumer prices and stimulating inflation sentiment within the U.S. High-rate tariffs on imported cars could result in immediate price hikes and increased procurement costs for the industry. Additionally, countries facing these high-rate tariffs are likely to take retaliatory measures.

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