Gazeta Lodz - Global outcry as Trump heaps tariffs on foreign autos and parts

Major car exporter Germany urged a firm response from the European Union, while Japan said it "will consider all options."

The US duties take effect starting April 3 and impact foreign-made cars and light trucks. Key automobile parts will also be hit within the month.

Global stock markets plummeted with automakers like Toyota, Hyundai and Mercedes leading the plunge. In New York, shares in General Motors tumbled with Ford and Stellantis also declining.

France Finance Minister Eric Lombard condemned the "hostility," saying the only solution for the European Union is to "raise tariffs on American products in response."

Canadian Prime Minister Mark Carney said he convened a meeting to discuss trade options, while Mexico's Economy Minister Marcelo Ebrard has sought "preferential treatment" for his country.

As Washington's major trading partners warned of retaliation, Trump ramped up his threats.

He said on social media that Canada and the EU could face "far larger" tariffs if they worked together "to do economic harm to the USA."

Trump ally and Tesla boss Elon Musk said his company would not be spared the pain, writing on X: "To be clear, this will affect the price of parts in Tesla cars that come from other countries. The cost impact is not trivial."

The American Automotive Policy Council warned that the tariffs must be implemented in a way that "avoids raising prices for consumers" and preserves the industry's competitiveness.

While Trump has invoked emergency economic powers for some earlier tariffs, his auto levies build on a government investigation completed in 2019.

- 'Cheaters' -

The Center for Automotive Research previously estimated that US tariffs –- including those on imported autos and metals –- could raise the price of a car by thousands of dollars and weigh on the jobs market.

In a briefing after the announcement, Trump's senior counselor Peter Navarro blasted "foreign trade cheaters" who he said turned the US manufacturing sector into a "lower wage assembly operation for foreign parts."

He took aim at Germany and Japan for reserving the construction of higher-value parts to their countries.

Since returning to the presidency, Trump has imposed fresh tariffs on imports from major 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 autos.

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.

- 'Devastating impact' -

Uncertainty over Trump's trade plans and worries they could trigger a downturn have roiled financial markets, with consumer confidence also slipping.

Trump has defended the levies as a way to raise government revenue and revitalize US industry.

Targeting imported cars could strain ties with Washington's allies, however.

"Imposing 25 percent tariffs on imported cars will have a devastating impact on many of our close trading partners," said Wendy Cutler, vice president at the Asia Society Policy Institute and a former US trade negotiator.

Washington has free-trade agreements with some affected parties, "calling into question the value of US commitments" under a trade deal, she added.

About one in two cars sold in the United States are manufactured in the country. Among imports, about half come from Mexico and Canada, with Japan, South Korea and Germany also major suppliers.

Besides automobiles, Trump is eyeing other sector-specific tariffs, including on pharmaceuticals, semiconductors and lumber.

Trump has promised a "Liberation Day" on April 2, when he is set to unveil reciprocal levies, tailored to different trading partners, to address practices that his government deems unfair.

White House Press Secretary Karoline Leavitt said these would focus on countries that have been "ripping off the United States," although Trump earlier said some numbers would be more conservative than many expected.

Q.Sikora--GL