According to one last Bloomberg Report, US President Donald Trump announced a 25% rate on all non -American manufactured cars. This is a decision to stimulate American manufacturing with cars built in the exempt United States. This is part of its wider plan to adjust trade relations, with more prices that should be deployed on April 2, nicknamed “Liberation Day”.
“What we are going to do is a price of 25% on all cars that are not made in the United States. It will be permanent,” said Trump from the Oval office. “We start with a 2.5%base, which we are and go to 25%.”
In particular, the price will be applied in addition to the car rate at 2.5% existing. In addition, if parts are produced in the United States, but the vehicle is not, these parts will be exempt from the price. Wednesday, the White House confirmed that the prices will take effect on April 2, with the collection starting on April 3.
The price would apply to fully assembled cars and essential automotive components, such as engines, transmissions, parts of the powertrain and electrical components. The list can grow over time to include more items. “”We will charge countries to do business in our country and take our jobs, take our wealth, take a lot of things that they have taken over years, “he added.
Tariff exempts automobile parts in accordance with USMCA
The rate currently exempts automobile parts in accordance with the American-Mexico-Canada (USMCA) agreement, which mainly authorizes the franchise trade between the United States and its two largest business partners.
Trump maintains that prices will stimulate the manufacture of the United States and eliminate the “ridiculous” supply chain involving the United States, Canada and Mexico. Trump stressed that the 25% price would simplify the process and considerably help debt in the United States.
In February, Trump alluded to the next car rates, and on Monday, he confirmed that they would soon be implemented. He also suggested that certain reciprocal rates could be less serious than expected, saying that they could even be lower than those that these other countries have imposed for years.
Howver, the decision aroused concerns about market volatility. Interestingly, he said that Elon Musk had not had a role in the advice on this automotive price policy, despite the previous comments suggesting that the prices could be “neutral net or perhaps good for Tesla”.
Foreign leaders criticize the prices
Foreign leaders quickly criticized the prices, reporting that Trump could intensify a world trade war that could affect global growth.
The president of the European Commission, Ursula von der Leyen, described this decision as “bad for businesses, worse for consumers, the new Prime Minister of Canada, Mark Carney, criticized the American commercial move, promising to defend Canadian workers and businesses. Last year, Canada exported nearly $ 50 billion Canadian dollars to vehicles in the United States, making cars major export.
Prices can increase prices for cars, impact sales and jobs
Before Trump’s announcement, the actions of car manufacturers listed in the United States abandoned the concerns that prices could disrupt the global automotive industry. The American automotive industry depends on imported parts and experts warn that these prices could make cars more expensive, limit choices for consumers and train less manufacturing jobs.
If the total cost of the new automatic rate of 25% is transmitted to consumers, the price of an imported vehicle could increase by $ 12,500, which potentially contributes to overall inflation. Trump was elected to the White House last year because voters thought he could reduce prices.
Automobile prices are part of Trump’s wider plan to reshape world trade, “reciprocal” taxes that should be imposed on April 2, the prices and sales taxes granted by other countries.