New auto tariffs take effect April 2
President Donald Trump on Wednesday announced sweeping new tariffs, declaring a 25% duty on all cars not manufactured in the United States. The measure, signed as a presidential proclamation in the Oval Office, is set to take effect on April 2, with revenue collection beginning the following day.
Trump emphasized that there would be “absolutely no tariff” on U.S.-made vehicles. According to White House aide Will Scharf, the new tariffs apply specifically to “foreign-made cars and light trucks,” and are in addition to existing auto import duties. Scharf projected that the tariffs will yield “over $100 billion of new annual revenue” for the U.S.
Industry and international backlash
European Commission President Ursula von der Leyen condemned the new tariffs, warning that the European Union would protect its economic interests while seeking diplomatic solutions. “Tariffs are taxes – bad for businesses, worse for consumers equally in the US and the European Union,” she said in a statement.
Shares of General Motors, Stellantis, and Ford dropped by approximately 5% in after-hours trading following the announcement. Trump previously granted a one-month exemption for vehicles from Mexico and Canada that meet USMCA requirements.
Uncertainty around implementation
Trump’s tariff rollout continues a pattern of erratic trade announcements that have stirred market volatility. With vehicle assembly relying on complex global supply chains, the administration’s assurance of “very strong policing” on parts-origin compliance has raised questions among industry leaders.
While Trump dubbed April 2 “liberation day” and teased an aggressive reciprocal tariff regime, recent remarks suggest a potential softening. “There’ll be flexibility,” he said on Friday, later suggesting that tariffs may be “more lenient than reciprocal.” Treasury Secretary Scott Bessent also stated that nations can negotiate in advance to avoid the new duties.
