Governments from Ottawa to Paris threatened retaliation yesterday after US President Donald Trump unveiled a 25 per cent tariff on imported vehicles, expanding a global trade war, hammering stocks and testing already strained ties with allies.
The new levies on cars and light trucks will take effect on Thursday, the day after Trump plans to announce reciprocal tariffs aimed at the countries he blames for the bulk of the US trade deficit.
The new levies could add thousands of dollars to the cost of an average vehicle in the United States, contradicting Trump’s campaign promise to lower consumer prices. Ferrari announced price rises of up to 10pc for cars sold in the United States, and other carmakers also warned they might raise prices as well. Dealers raised fears of job losses.
The tariffs are a sucker punch for some of the United States’ most important allies and would come atop other trade penalties Trump has already put in place. Mexico, Japan, South Korea, Canada and Germany are the biggest suppliers of automotive imports to the United States that were worth $474 billion in 2024.
Canada Prime Minister Mark Carney called a cabinet meeting to weigh a response, with retaliatory countermeasures a possibility.
Relations with Washington have plummeted over issues such as the war in Ukraine and the upending of a decades-old transatlantic alliance. With billions of euros wiped from German auto shares yesterday, officials in Europe’s biggest economy called for a tough response.
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