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President Donald Trump has escalated trade tensions by imposing high tariffs on auto imports and parts, drawing sharp warnings from international trade partners who have threatened countermeasures. The decision comes just days before the administration is set to implement additional tariffs.
Wall Street took a steep dive on Wednesday as markets braced for President Donald Trump’s afternoon announcement, with jitters rippling through trading floors. Toyota, the globe’s leading automaker by sales, saw its shares skid over three percent, reflecting the unease gripping investors.
Japan’s government didn’t hold back, calling the move “extremely regrettable” in a sharp rebuke. Prime Minister Shigeru Ishiba, speaking with measured resolve, told reporters that Tokyo is weighing “all kinds of countermeasures” to respond, signaling a brewing standoff as the economic stakes climb higher.
“What we’re going to be doing is a 25 percent tariff on all cars that are not made in the United States,” Trump said, as he signed the order in the Oval Office.
Starting at 12:01 a.m. (0401 GMT) on April 3, new tariffs will hit foreign-made cars and light trucks entering the U.S., with key auto parts slated to feel the pinch within the same month. Canadian Prime Minister Mark Carney didn’t pull punches, calling the move a “direct attack” on Canada’s workforce and announcing a Thursday cabinet meeting to hash out a counterstrike.
Brazil’s President Luiz Inacio Lula da Silva echoed the sentiment, insisting his nation “won’t sit idle” as the levies loom. Even Elon Musk, a Trump confidant and Tesla’s chief, seemed caught off guard, admitting the tariffs would sting. “It’s not trivial,” he wrote on X, explaining that the cost of imported parts for Tesla vehicles would climb noticeably.
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In a briefing after Trump’s reveal, Peter Navarro, the president’s trade and manufacturing adviser, unloaded on what he called “foreign trade cheaters,” accusing them of reducing America’s manufacturing might to a low-wage hub for assembling overseas parts. He singled out Germany and Japan, slamming them for hoarding the production of high-value components.
Since beginning his second term in January, Trump has imposed fresh tariffs on imports from major US trading partners Canada, Mexico and China — alongside a 25 percent duty on steel and aluminum.
The latest levies will be in addition to those already in place for products.
But the White House added that vehicles entering under the US- Mexico- Canada Agreement (USMCA) can qualify for a lower rate depending on their American content.
Similarly, USMCA-compliant auto parts will remain tariff-free as officials establish a process to target their non-US content.
