Trump Orders 25-Percent Tariffs on All Foreign-Built Cars—Including Canada and Mexico

The on-again-off-again tariffs are now apparently on again, at least for cars not built in the United States. President Donald Trump on Wednesday signed a new executive order announcing a 25-percent tariff on all foreign-built vehicles.

Speaking from the Oval Office, the president said the tariff would “spur growth” and boost the US auto industry “like it’s never flourished before.” The tariff would also allegedly bring in $100 billion in new revenue for the US.

The latest tariff goes into effect on April 2, barring any further delays. Trump says the tax is “permanent” for the duration of his term. In addition, Trump mentioned an effort to get a tax deduction for people buying a new car made in America. That initiative still has to go through Congress. But if approved, it would make interest on new car loans tax deductible. Again, that only applies to cars built in America.

The 25 percent tariff is in addition to existing tariffs in place. When it comes to auto parts, things are still a bit unclear. According to Trump, “if parts are made in America and a car isn’t, those parts are not going to be taxed, and we’ll have very strong policing as far as that’s concerned.” Presumably, that means parts made in America that cross the border to be used in components and sent back to the US for final assembly won’t be subject to a tariff. But if they’re used in a car that is built outside the US, the car will be hit with the tariff. We don’t envy automakers right now.

In any case, this means some popular vehicles from automakers in Japan, South Korea, and Germany will get more expensive. It also means several models from Detroit automakers will see prices increase. It could get complicated for some models like the Chevrolet Silverado, which is built in multiple locations both in America and Mexico. The Ford Maverick could take a hit, too, since it’s built in Mexico.

This certainly isn’t the first time the Trump Administration has announced stiff tariffs in recent weeks. And if things completely change between now and April 2—or on April 3—that wouldn’t be a surprise either.