Washington, 27 March 2025 (dpa/MIA) - President Donald Trump on Wednesday announced 25% tariffs on cars imported into the United States in a bid to boost the domestic auto industry.

"This will continue to spur growth like you haven't seen before," he said in the announcement from the Oval Office.

The 25% tariff will go into effect on April 2 and apply to all cars not made in the US, meaning even US manufacturers with models made overseas would be hurt under the scheme.

The move further intensifies the trade conflict between the US and the European Union. The punitive measures are likely to hit the German automotive industry particularly hard.

Trump said the levies will strengthen the US as a production location and reduce trade deficits.

"We're going to take back just some of the money that has been taken from us," said Trump, who has long complained about trade imbalances between the US and other countries.

The move will ensure that carmakers will increasingly produce in the US again, Trump argued: "I think our automobile business will flourish like it's never flourished before."

"This is the beginning of Liberation Day in America," continued Trump. He has promised to make a sweeping tariff announcement on April 2, which he has labelled "Liberation Day."

The tariffs are the latest in a slew of levies the US president has imposed since taking office. As it stands, Trump has introduced a 20% tariff on all imports from China and a 25% global tariff on imported steel and aluminium products.

In February, Trump announced 25% across-the-board tariffs on all Canadian and Mexican imports. But he later paused the levy on certain goods and services compliant with the United States-Mexico-Canada Agreement (USMCA).

US imports a lot of cars

The most important carmakers in the US are General Motors, Ford and Stellantis, which together account for around half of the country's car production. However, the US also imports a significant number of motor vehicles, engines and other car parts.

Almost half of all vehicles sold in the US are imported, as reported by the New York Times, citing data from the Wall Street consulting firm Bernstein. Nearly 60% of the parts in vehicles assembled in the US are imported.

The main suppliers include Mexico, Japan, South Korea, Canada and Germany.

Trump regularly rails against the EU

Trump has been critical of the European Union – because the US imports more cars from the EU than the other way around.

The 78-year-old has repeatedly expressed his anger in the past about the EU's tariffs on car imports from the US. While the US only levies a 2.5% tariff on cars from the EU, the EU charges 10% on US car imports.

However, the US tariffs on pickups and light commercial vehicles are significantly higher at 25%. Some companies therefore produce in the US or deliver the vehicles in individual parts and assemble them in the US.

Trump is also bothered by other EU regulations, such as strict emissions and safety standards, which could act as further barriers to trade. A member of Trump's staff said that the 25% tariffs would be added to existing tariffs on car imports.

Car prices in the US are likely to rise with the imposition of far-reaching tariffs. Some manufacturers, such as Ford Motor, Hyundai and Stellantis, could temporarily benefit from the tariffs because they have many unsold vehicles at dealerships, according to the New York Times.

Von der Leyen unhappy with latest US measures

European Commission President Ursula von der Leyen has condemned the new 25% tariffs.

"I deeply regret the US decision to impose tariffs on European automotive exports," von der Leyen said in a statement, calling them "bad for businesses, worse for consumers equally in the US and the European Union."

The Commission president said that the EU would "continue to seek negotiated solutions, while safeguarding its economic interests."

"As a major trading power and a strong community of 27 Member States, we will jointly protect our workers, businesses and consumers across our European Union," she continued, adding that Trump's latest announcement and "other measures the US is envisaging in the next days" would be now assessed.

MIA file photo