Donald Trump confirms 25% auto tariffs on all foreign made automobiles

US President Donald Trump confirmed 25% tariffs for the auto industry on Wednesday, raising a storm in the global trade scenario.

“Effective at midnight, we will impose a 25 percent tariff on all foreign made automobiles,” Trump said at the “Make America Wealthy Again” event in Rose Garden.

"If the car is built in America, you're going to get an interest rate deduction. It has never happened in America," he said.


Moreover, the US President said that 10% base interest will also be added to all US imports though more clarity on it is pending.

Beginning April 3, the US will levy a 25% tariff on fully assembled cars from India. By May 3, similar tariffs were expected on auto parts, raising concerns in India’s auto sector, which is one of the country’s largest exporters to the US.

Announced during the “Make America Wealthy Again” event, the tariffs were part of Trump’s broader "Fair and Reciprocal Plan," under which the US imposed tariffs "equivalent to those levied by other nations on US goods".

On March 26, Trump had announced the imposition of 25% tariffs on foreign-made cars and auto parts. These tariffs were set to go into effect on April 2, targeting a critical sector that includes exports of fully assembled vehicles and auto components.

The impact of these tariffs is particularly concerning for India.

The latest Emkay report suggested that India could lose up to $6 billion in exports to the US if the tariffs were set at 10%. If the tariff rate increased to 25%, the losses could escalate to $31 billion, with the auto industry being hit hardest.

The Central government has already begun gathering data from the auto parts industry to assess the full impact of the tariffs, ET had earlier reported. The sector, which exports around $6.79 billion worth of car parts annually to the US, is bracing for a significant challenge.

Industry stakeholders in India have called for greater clarity on the application of the tariffs, particularly regarding which specific auto parts will be targeted.

As the tariffs begin to affect global trade, there are ongoing efforts to negotiate potential adjustments. According to a Reuters report, India has expressed willingness to offer tariff cuts on more than half of US imports worth $23 billion, marking one of the largest concessions in years.