Trump’s 25% Auto Tariff Not Concerned About Price Increases: Focused on Encouraging Consumers to Purchase American Cars Regardless of Industry Cost Pass-Through to Consumers
US President Donald Trump Announces 25% Tariff on All Imported Cars and Parts
On March 30, at a White House press conference, President Donald Trump reiterated his strong stance, stating that starting next week, a 25% tariff will be imposed on all imported cars and parts. Despite concerns from the public about potential price increases harming consumer interests, Trump countered by saying, “We don’t care about price increases at all, because I want everyone to start buying American cars.”
Regardless of Price Hikes, Trump Aims to Benefit American Cars
Trump clearly expressed that he is not worried about tariffs leading to increased car prices: “I don’t care if they raise prices, because everyone will start buying American-made cars.” When asked whether he had ever requested car manufacturers not to pass on tariff costs to consumers, he responded, “No, I never said that. In fact, I hope they raise prices.”
New Tariffs to Take Effect Next Week, Targeting All Imported Cars and Parts
Trump’s new tariff policy will come into effect next week, covering all imported passenger cars, light trucks, and key components, including:
- Engines
- Transmissions
- Electrical systems
These will be additional to existing tariffs. However, for countries that have signed free trade agreements (FTAs) with the U.S., such as Canada and Mexico, certain products might be exempt from tariffs, but any vehicle containing “non-American” parts will still be taxed.
White House Officials Claim Tariffs Will Ignite U.S. Auto Industry
According to Bloomberg, Kevin Hassett, director of the National Economic Council, stated that while there may be some “small pain” in the short term, U.S. automotive manufacturing will experience “explosive growth” in one to two years. Trump’s economic advisor, Peter Navarro, mentioned in an interview that these auto tariffs would generate $100 billion in revenue for the U.S., with the overall tariff policy expected to create $600 billion in income. Navarro described it as the largest tax cut for the middle and working classes in U.S. history, asserting that foreign manufacturers will absorb most of the costs, which would not lead to inflation in the U.S.
General Motors Faces Pressure as Many Popular Models Are Not Made in the U.S.
While Trump emphasizes the promotion of “American goods,” automakers like General Motors (GM) are feeling the pressure. It is understood that GM has many best-selling models manufactured in Mexico, Canada, or South Korea:
- Silverado Pickup: part produced in Mexico and Canada
- Chevy Trax Compact SUV: South Korea
- Equinox Crossover SUV: partially imported
- Electric Equinox and Blazer: made in Mexico
Last year alone, GM sold over 200,000 units of both Equinox and Trax, indicating a significant impact.
The image shows the General Motors Silverado Pickup.
Public Concern Over Prices Exceeds Tariff Issues; Average Car Price May Rise by 11%
According to a poll conducted by foreign media, 64% of Americans believe Trump has ample time to address the issue of “lowering prices,” while 55% feel he has spent too much time on “tariff issues.” Although the White House team downplays concerns over price hikes, JP Morgan analysts predict that average car prices may increase by 11% following the implementation of new tariffs, potentially hurting consumers’ wallets.
Will Trump’s Tariff Strategy Work or Spark Public Outcry?
Recently, Trump has aggressively pushed for “tariffs to save the country,” emphasizing the revival of American manufacturing and the creation of numerous jobs. However, as pressure from rising car prices increases, whether this will genuinely lead American consumers to support domestic vehicles or trigger public discontent remains to be seen, as the impact of this auto tariff policy begins to unfold.
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