Donald Trump's announcement last night to impose 25% tariffs on all imported cars has caused a storm of reactions, a move that expands the front of the trade war that has opened since his return to the White House.
"What we're going to do is put a 25% tariff on every car that's not made in the United States," Trump said from the Oval Office.
The Republican president sees the new tariffs as a means to boost revenue to offset tax cuts he has announced, while also seeking to revive the country's industrial base, which has been in decline in recent years.
The United States imported $2024 billion worth of passenger vehicles and $220 billion worth of auto parts and other goods through 474. Major suppliers include Mexico, Japan, South Korea, Canada and Germany, countries expected to be hit hardest by the new measure.
International reactions
Von der Leyen: "I deeply regret the American decision"
The European Union "deeply regrets" US President Donald Trump's decision to impose 25% tariffs on European vehicles imported into his country, European Commission President Ursula von der Leyen said on Wednesday evening via X. "I deeply regret the American decision," Ms von der Leyen noted, adding that Brussels "will continue to seek solutions through negotiations" with Washington.
Japan: "Appropriate retaliatory measures will be taken"
Japan aims to take “appropriate measures” to retaliate against additional tariffs on Japanese vehicles announced by the US government and will consider “all options,” Japanese Prime Minister Shigeru Ishiba warned on Tuesday. “We need to think about appropriate measures after this announcement. Of course, we will consider all options,” Ishiba told members of the Japanese parliament. The auto industry produces roughly a third of Japanese-made goods exported to the US.
The Japanese government also warned against the "major impact" that Trump's actions would have on US-Japan trade and economic relations, as well as on the global economy as a whole.
"We believe that these measures (...) and other more general trade restrictions imposed by the US government could have a major impact on economic relations between Japan and the US, as well as on the global economy and the multilateral trading system," Japanese government spokesman Yoshimasa Hayashi told reporters.
The additional 25% tariffs on Japanese imported cars announced by Washington are a “deeply regrettable” development, the government spokesman noted earlier in the briefing for accredited journalists. “It is deeply regrettable that the US government has announced these tariff measures (…) that include Japan,” he insisted.
Brazil: "We cannot remain idle"
Brazilian President Luiz Inacio Lula da Silva said today that his country "cannot do nothing" in the face of the tariff attack launched by his American counterpart Donald Trump, extending the one imposed on Wednesday to the automotive sector.
“We cannot do nothing” as if “they are the only ones who are right and have the ability to impose tariffs on other people’s products,” Lula said during a press conference on the sidelines of an official visit to Tokyo. In Brasilia “we will adopt the approach that in our opinion will be beneficial for Brazil,” he added.
Canada: Direct attack on our workers
The US president's decision is a "direct attack" on Canadian workers, Canadian Prime Minister Mark Carney said on Wednesday.
"Tariffs on our auto industry are a direct attack on workers" in Canada, the new Liberal leader and prime minister told reporters, accusing Republican President Trump of "betraying" the free trade agreement the two countries and Mexico have signed.
Toyota, Nissan, Honda, Hyundai shares fall
Japanese and South Korean auto giants, from Toyota to Hyundai, saw their stock prices fall after Asian markets opened, following the announcement of additional tariffs on imported vehicles in the United States — a market of critical importance for these manufacturers.
At around 02:10 (Greece time) on the Tokyo Stock Exchange, the shares of the big names in the sector were all falling without exception: Toyota (–3,72%), Mitsubishi (–3,7%), Nissan (–3,2%), Honda (–2,77%). The general index was also showing a downward trend, although not as spectacular (–0,79%). In Seoul, shares of Hyundai Motor (–3,15%) and Kia Corporation (–2%) were on a similar trajectory.
Japan is particularly vulnerable. Last year, the auto industry accounted for 28% of Japanese-origin goods exported to the United States, or about $40 billion. And the auto industry is a pillar of the Japanese economy, employing 10% of its workforce.
For Japanese giant Toyota, number 1 in the world, ahead of its big rival, the German Volkswagen, the US is an absolutely crucial market. Japanese manufacturers also have a large presence in Mexico, as part of the industry's interconnected production chains. Every year, Japanese manufacturers export some 1,37 million vehicles to the US, although this is a long way from their peak of 3,43 million units in 1986, Masanori Katayama, president of JAMA, the Japan Automobile Manufacturers Association, recalled last week. "Adjustments" to production would be mandatory if tariffs were imposed, Mr. Katayama warned.
Toyota recently announced that it will begin production at its 11th U.S. plant in April. However, of the 2,33 million vehicles registered in the U.S. last year, only 1,27 million were produced there.
Toyota also has one plant in Canada (hybrids) and two more in Mexico, with their production mainly destined for the US market, which means that tariff barriers will hit them hard. If the additional tariffs on products imported from Canada and Mexico — currently suspended — are reimposed, its vehicles imported from those two countries into the US will be subject to 50% tariffs.
Cars account for 27% of South Korean exports to the United States. Of the 2,78 million vehicles exported from South Korea last year, about 1,43 million were destined for the American market, worth about $35 billion. To appease the Trump administration and soften the impact of tariffs as much as possible, Hyundai announced on Monday that it plans to invest $21 billion in the United States over the next four years.
Source: protothema
