Trump Announces 25% Tariff on Cars and Car Parts

President Donald Trump has announced new import taxes of 25 per cent on cars and car parts coming into the US.

US President Donald Trump.

The BBC is reporting that Trump said the latest tariffs would come into effect on April 2, with charges on businesses importing vehicles starting the next day. Taxes on parts are set to start in May or later.

The president said the measure would lead to “tremendous growth” for the industry, promising it would spur jobs and investment in the US.

Meanwhile, according to BBC reports, analysts have said the move is likely to lead to the temporary shutdown of significant car production in the US, increase prices, and strain relations with allies.

Trump’s latest move threatens to upend global car trade and supply chains.

The US imported about eight million cars last year – accounting for about US$240 billion in trade and roughly half of overall sales.

Mexico is the top supplier of cars to the US, followed by South Korea, Japan, Canada and Germany.

Many US car companies have operations in Mexico and Canada as well, set up under the terms of the longstanding free trade agreement between them.

The White House said the new tariffs on car parts from Canada and Mexico are exempt while US customs and border patrol set up a system to assess the duties.

The neighbouring countries see goods worth billions cross borders each day.