Trump’s Surprise 25% Auto Import Tariff Shakes Global Car Markets

President Donald Trump’s decision to impose a 25% tariff on car imports is set to kick in on April 2, and it’s already rattling global auto markets. Roughly half of U.S. car sales depend on vehicles built beyond its borders, so a measure of this size could disrupt established supply chains, raise sticker prices, and sour diplomatic ties. Companies like General Motors and Stellantis—both with plants and supplier networks outside the country—have seen immediate dips in share value, while South Korea’s Hyundai, which just pledged $21 billion for U.S. expansion, hopes to soften the blow by assembling more vehicles at home.

Meanwhile, foreign allies are blindsided. Mexico is America’s top source for imported cars, yet it’s only briefly exempt from the tariff on parts. And Canada’s Prime Minister, Mark Carney, has labeled the levy a direct attack on his country’s car industry. Trump credits the move with “strengthening the heart of American manufacturing,” but he’s equally risking a flare-up of tariff retaliation from global partners. Already, experts warn of higher price tags in showrooms, paired with potential temporary closures at U.S. assembly lines if parts are held up by red tape or sky-high costs.

Not everyone opposes the plan, though. The United Autoworkers union, led by Shawn Fain, sees it as a powerful incentive to bolster domestic production. But with the car business so deeply woven across borders, questions remain about whether taxes on imported vehicles and components will truly bring new factories and jobs—or simply raise costs for American families. Musk’s Tesla has also been frank about feeling the pain, while the White House insists other foreign automakers can follow Hyundai’s example: build here, avoid penalties, and help reshape America’s auto landscape.