Kathmandu. US President Donald Trump has announced steep tariffs on auto imports and parts. America’s trading partners have warned of retaliation against Trump’s latest tax policy.
Wall Street fell ahead of Trump’s announcement on Wednesday afternoon, while the price of Toyota, the world’s top-selling automaker, fell more than 3 percent. Japanese Prime Minister Shigeru Ishiba said Tokyo was “considering all kinds of retaliatory measures.”
Canadian Prime Minister Mark Carney called Trump’s tariffs a “direct attack” on his country’s workers. Brazilian President Luiz Inacio Lula da Silva also said his country “cannot stand still.”
Signing the order in the Oval Office, Trump said, “We have decided to impose a 25 percent tariff on all cars not made in the United States.” The announcement said, “This tariff will take effect after 12:01 p.m. U.S. time on April 3 and will affect cars and light trucks made abroad. Major automobile parts will also be affected within a month.”
Trump warned that if Canada and the European Union work together to inflict “economic damage” on the United States, he would impose “far greater tariffs than currently planned.” In an interview with reporters after Trump’s announcement, Peter Navarro, Trump’s senior adviser on trade and manufacturing, criticized the “foreign trade fraud,” saying it had made America’s manufacturing sector “safe for low-wage foreign workers.”
He criticized Germany and Japan for concentrating production of high-value parts domestically and exporting cheaper equipment. Trump ally and Tesla owner Elon Musk said Washington’s tariffs had “not affected” the cost impact of his firm’s cars.
Since taking office in January, Trump has imposed new tariffs on imports from major U.S. trading partners Canada, Mexico and China, as well as 25 percent tariffs on steel and aluminum. The new taxes would be in addition to taxes already imposed on products, but the White House said vehicles entering under the United States-Mexico-Canada Agreement (USMCA) could qualify for lower rates based on their American content.
Uncertainty over Trump’s trade plan and concerns it could trigger a recession have rattled financial markets and eroded consumer confidence in recent months. Shares of General Motors and Stellantis fell more than 3 percent before Trump’s announcement. In Japan, carmakers Nissan lost 2.5 percent, Honda 3.1 percent and Mitsubishi Motors 4.5 percent, while Mazda and Subaru lost about 6 percent in share prices.
South Korea’s Hyundai Motor Co. fell 2.7 percent in Seoul. Trump has defended the tariffs as a way to raise government revenue and revive American industry. But targeting imported cars could strain relations with close partners such as Japan, South Korea, Canada, Mexico and Germany.
“A 25 percent tax on imported cars would have a devastating impact on many of our closest trading partners,” said Wendy Cutler, vice president of the Asia Society Policy Institute and a former U.S. trade negotiator. He has questioned the value of Washington’s free trade agreements with some affected parties and the value of U.S. commitments under trade agreements.
About 50 percent of cars sold in the United States are made domestically. Half of imports come from Mexico and Canada, with Japan, South Korea and Germany also major suppliers. More than half of all cars made in the United States are assembled abroad, according to a White House official.
The American Automotive Policy Council, a group of Detroit’s “Big Three” automakers representing Ford, General Motors and Stellantis, issued a cautious statement about the tax hike, saying it hopes the policy will boost U.S. auto production.
Wednesday’s announcement came ahead of Trump’s so-called “Liberation Day” for the world’s largest economy on April 2. He has pledged reciprocal tariffs with various trading partners to correct practices Washington deems unfair. On Wednesday, he said the tariffs would affect all countries.
Trump has used emergency economic powers for some recent tariffs, and his auto levy is based on a government investigation completed in 2019. The investigation found that excessive imports were weakening the domestic economy and could undermine national security.
प्रतिक्रिया दिनुहोस्