Now Trump will impose 25% tariff on foreign cars in America, plan is to raise 100 billion dollars

US President Trump's announcement of tariffs has given sleepless nights to many countries around the world. After the recent announcement of tariffs on Venezuela, US President Donald Trump has announced that he will impose a 25 percent tariff on foreign cars and their parts in the US. The White House claims that this step will promote domestic manufacturing. Also, the US will get a revenue of $100 billion from this every year.

Trump says that if you make your car in America, there will be no tariff on it. However, this decision can create financial challenges for those automakers who are dependent on global supply chains. Trump's decision to impose this new import duty will come into effect from April 2 and its recovery will start from April 3.

What is Trump's plan?

Trump believes that these tariffs will encourage local production in the US and reduce dependency on other countries. In which auto parts and finished vehicles are manufactured in the United States, Canada and Mexico. 

However, automakers, which depend on global supply chains for their components, may face higher costs and lower sales. Experts say that these tariffs may lead to an increase in vehicle prices, which will affect middle and working class consumers the most.

The decision has also been criticised by foreign leaders, with the potential to escalate global trade tensions, particularly with Canada and the European Union. 

The EU has announced retaliatory tariffs worth $26 billion on US exports. The UK, which exported £6.4 billion worth of cars to the US in 2023, will be particularly affected by the tariffs.

Buying a car in America will become expensive

Experts believe that Trump's decision to levy tariffs can disrupt the supply chain of automakers and American customers may have to face inflation. This may make buying a car expensive in the coming days.

Auto shares crashed

Shares of American and foreign automakers fell after Trump's decision. General Motors shares fell nearly 3%, while Ford shares rose marginally. Shares of Stellantis, which owns Jeep and Chrysler, fell about 3.6%. 

The Trump administration argues that these tariffs will promote significant growth in the US auto industry, although experts say it could take years to set up new factories and shift production.

How much role did Musk play in this decision?

Tesla CEO Elon Musk was believed to have played an important role in this decision but Trump has made it clear that Musk has no role in making the auto tariff policy. Trump said that Musk has not given any advice on auto tariff.