President Donald Trump is set to unveil new tariffs on automobile imports during a press conference at the White House on Wednesday, marking a significant escalation in his administration’s ongoing trade crackdown ahead of broader measures planned for April 2.
White House press secretary Karoline Leavitt confirmed that Trump will speak from the Oval Office at 4:00 p.m. ET. The announcement is expected to focus on tariffs for finished vehicles rather than auto parts, though the administration has not yet released full details.
The move is part of Trump’s long-promised effort to impose what he calls “reciprocal tariffs” on foreign trading partners, targeting countries that levy duties on US exports. The plan—slated to take effect next week—would impose tariffs to counter foreign trade practices including value-added taxes and other import restrictions.
Trump had previously indicated that his administration might announce auto-specific tariffs before April 2, which he has referred to as “liberation day.” At a Cabinet meeting earlier this week, he said: “We’ll be announcing that fairly soon over the next few days, probably, and then April 2 comes, that’ll be reciprocal tariffs.”
Market jitters and mixed messaging
Markets reacted swiftly to news of the press conference, with major indices falling before recovering slightly on reports that the duties might exclude auto parts. The S&P 500 dropped as much as 1.2%, and the Nasdaq fell over 2% before paring losses. Shares in major automakers were hit amid fears of price hikes and disruptions to cross-border manufacturing.
While Trump has previously acknowledged concerns from US automakers about the potential for tariffs to harm their businesses, his administration’s messaging on the issue has shifted repeatedly in recent weeks. Treasury Secretary Scott Bessent recently suggested that countries could negotiate with the US to avoid the April 2 tariffs, and Trump himself said on Friday there would be “flexibility” in how the measures are applied.
Potential price increases and production risks
Industry analysts say that even limited tariffs could raise the cost of vehicles significantly. If the duties apply only to fully assembled vehicles, the impact would likely be confined to foreign-built cars. But if parts are included, the price tag for US-made vehicles could rise substantially due to the North American auto industry’s complex supply chains.
According to Cox Automotive, tariffs could add up to US$3,000 to the cost of a US-assembled car and up to US$6,000 for vehicles built in Canada or Mexico if those countries are not granted exemptions. Roughly 61% of the 4 million vehicles made in Mexico in 2024 were shipped to the US. Canadian plants exported 1.1 million vehicles to US dealerships last year.
The Anderson Economic Group estimates that if auto parts are included in the tariffs, US production costs could rise by between US$3,500 and US$12,000 per vehicle.
Even so, many vehicles that appear “American-made” include parts sourced from across North America. Under US trade law, Canadian and Mexican parts count as “domestic,” but no vehicle currently exceeds 75% domestic content under that broad definition.
Implications for US automakers and workers
While some models—such as the Chevrolet Blazer or Ram pickups—might be moved back to US production facilities, analysts say that such transitions would take years and involve significant costs. In the short term, consumers are likely to face reduced vehicle choices and higher prices, particularly in the entry-level segment.
The tariffs could also disrupt US parts suppliers, which employ roughly 550,000 workers—nearly double the number working in US vehicle assembly plants. If demand for Canadian and Mexican-built vehicles drops, so too could demand for US-made components exported to those countries. In 2024, the US exported US$35.8bn worth of parts to Mexico and another US$28.4bn to Canada.
Retaliation is also a concern. In 2024, the US exported US$14.9bn worth of vehicles to Canada and US$4.6bn to Mexico. If either country imposes counter-tariffs, US exports could decline, putting further pressure on domestic production.
Outlook uncertain as April 2 looms
Trump has repeatedly praised recent domestic manufacturing announcements, including Hyundai’s US$21bn US expansion, as evidence that tariffs “very strongly work.” But the unpredictable nature of the administration’s trade policy has unsettled markets and left business leaders unsure of how to respond.
The White House has not clarified whether vehicles produced under the United States-Mexico-Canada Agreement (USMCA) will be exempt from the new measures. Trump had previously granted a reprieve for Canada and Mexico under that framework, but that waiver is set to expire on 2 April.
