Trump presses ahead with 25% car tariffs, ratcheting up trade war

US President Donald Trump on Wednesday announced plans for long-promised tariffs of up to 25 per cent on vehicle imports, widening the global trade war he kicked off upon regaining the White House this year in a move car industry experts expect will drive up prices and stymie production.

“What we’re going to be doing is a 25 per cent tariff for all cars that are not made in the United States,” Trump said at an event in the Oval Office.

“We start off with a 2.5 per cent base, which is what we’re at, and go to 25 per cent.” Trump has long promised higher duties on imported cars, and the timing of the announcement suggests that they would coincide with his April 2 plans for reciprocal tariffs aimed at the countries responsible for the bulk of the US trade deficit.

Trump, who sees tariffs as a tool to raise revenue to offset his promised tax cuts and to revive a long-declining US industrial base, has for weeks promised to announce those levies, and possibly some additional sectoral tariffs, on April 2.

Shares of US-listed carmakers fell on news of the press conference on concerns that tariffs would send shock waves through a global vehicle industry that is already reeling from uncertainty caused by Trump’s rapid-fire tariff threats and occasional reversals.

The US stock market also closed lower on worries over tariffs, which have dogged investors for much of the last month. The benchmark S&P 500 Index fell 1.1 per cent before the press conference and is down more than 4 per cent so far in March for its worst monthly performance in nearly a year.