Donald Trump announces new auto tariffs: Which vehicles come under purview? Are they permanent? — All you need to know

US President Donald Trump said on Wednesday he will implement a 25 per cent tariff on auto imports starting next week, setting the stage for an even broader push on levies next week.

What are Donald Trump's new auto tariffs?

Donald Trump signed an executive order on Wednesday imposing a 25 per cent tariff on automobiles made outside the US. The White House said $100 billion is projected in new revenue due to auto tariffs. It will "strengthen America's manufacturing industry," the White House said.

Which vehicles are impacted?

The Trump administration announced major tariffs on foreign-made cars, trucks and certain auto parts entering the US. A 25 per cent tariff will be imposed on the following imports:

1. Passenger vehicles, including sedans, SUVs, crossovers, minivans, cargo vans, and light trucks
2. Key automobile parts, such as engines, transmissions, powertrain parts, and electrical components
3. As per the order, importers of automobile parts under the United States-Mexico-Canada Agreement will be given the opportunity to certify their US content, and systems will be implemented such that the 25 per cent tariff will only apply to the value of their non-US content.
4. USMCA-compliant automobile parts will remain tariff-free until the Secretary of Commerce, in consultation with US Customs and Border Protection (CBP), establishes a process to apply tariffs to their non-U.S. content.

“If parts are made in America and a car isn't, those parts are not going to be taxed or tariffed and we will have very strong policing... It's one number and that number is going to be used to reduce debt greatly in the United States and build things,” Trump explained.

When will these auto tariffs be implemented?

The tariffs on car parts are set to take effect “no later than May 3,” according to the text of the proclamation Trump signed.

Are these auto tariffs permanent?

Trump said, “The auto tariffs of 25% will be permanent for rest of my term."

Which are the countries most impacted?

The most impacted countries are Canada, Mexico, Germany, South Korea and Japan.

Are these auto tariffs legal?

A new White House press release lays out the legal authority the president is using to justify new tariffs on imported cars.

“Today, President Donald J. Trump signed a proclamation invoking Section 232 of the Trade Expansion Act of 1962 to impose a 25% tariff on imports of automobiles and certain automobile parts, addressing a critical threat to US national security,” the statement read.

As per the government, Section 232 provides that, in this situation, the President shall take such other actions as the President deems necessary to adjust the imports of the relevant article so that such imports will not threaten to impair national security.

Why impose a new auto tariff?

Donald Trump's order stated that “imports of automobiles and certain automobile parts continue to threaten to impair the national security of the United States and deem it necessary and appropriate to impose tariffs...to adjust imports of automobiles and certain automobile parts so that such imports will not threaten to impair national security.”

Trump's administration also said the country has lost 2,86,000 auto parts manufacturing jobs since 2000. "The U.S. auto industry employs approximately ONE MILLION Americans. Auto parts manufacturing jobs total approximately 553,300. But we’ve lost 286,000 auto parts manufacturing jobs since 2000 – down 34%," it said.

“These tariffs will fuel American ingenuity and bring our edge back,” the US government said.

Which automakers are planning major investments in the US?

According to Rapid Response 47, "automakers are already planning major investments in the United States" as the Trump administration leverages tariffs to remake "the US into a global manufacturing powerhouse". It listed some companies that have reportedly announced investment in the US. They include:

1. Hyundai announced a $20 billion investment in the United States — including $5.8 billion for a new steel plant in Louisiana, which will create nearly 1,500 jobs.

2. Stellantis announced a $5 billion investment in its US manufacturing network, including re-opening an Illinois manufacturing plant, as it pledges to increase domestic vehicle production.

3. Volkswagen is considering shifting production of the high-end Audi and Porsche brands to the US.

4. Honda is expected to produce its next-generation Civic hybrid model in Indiana.

5. Nissan is considering moving production from Mexico to the US.

6. Rolls-Royce is expected to “ramp up” production in the US by hiring more American workers and expanding its US-based operations.

7. Volvo is considering expanding its US-based output.