25% On Imported Cars: Trump Upsets The Global Economy Once Again

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13h05 ▪
3
min read ▪ by
Ariela R.

Donald Trump is once again launching the trade war. The American president has just announced a 25% tax on imported vehicles. The goal is to protect the domestic automotive industry. A decision that could reshape the landscape of the global economy!

A hammer smashing a car with a brutal impact on the global economyA hammer smashing a car with a brutal impact on the global economy

For the good of the economy, Trump relaunches industrial protectionism at 25%

To revive the American economy, the Trump administration is imposing a 25% tax on imports of vehicles and automotive parts. Effective from April 2, the measure concerns:

  • cars;
  • SUVs;
  • minivans;
  • light trucks;
  • engines;
  • transmissions;
  • electrical components.

According to the White House statement, this decision is based on the Section 232 of the Trade Expansion Act of 1962. This invokes a national security concern.

The figures indeed reveal the extent of the imbalance affecting the American economy. In 2024, half of the vehicles sold in the United States were from abroad. However, only a quarter of the total content met the criteria for “Made in America.”

For Trump, this dependency compromises industrial sovereignty. He therefore chooses the tariff weapon to reconfigure the playing field.

Note:

Companies located under the United States-Mexico-Canada Agreement (USMCA) can certify the portion of American content in their products. Only the foreign value will be taxed. However, the process is expected to be complex.

The logic remains simple: produce more locally or pay more.

The comeback of “Made in America” goes through customs

Since 2000, employment in the manufacturing of automotive parts has declined by 34%. Meanwhile, the trade deficit in this sector has reached $93.5 billion. Trump is capitalizing on these figures to justify his customs shift. His message is clear: reindustrialize, reinvest, and reclaim.

Economic protectionism is entering a new phase. The measure indeed seeks to force multinationals to reconsider their supply chains. Indirect incentives are multiplying, such as the promise of tax benefits for vehicles produced in the United States.

Studies cited by the White House support this strategy in favor of the economy. The International Trade Commission, the Atlantic Council, and the Economic Policy Institute indeed highlight expected benefits on:

  • employment;
  • local innovation;
  • industrial resilience.

That said, the risk of inflationary effects and trade retaliations remains high.

In any case, this new tax marks a turning point in American economic policy. Beyond the automotive sector, Trump rekindles the debate on industrial sovereignty. If other countries retaliate, a new trade war could emerge. Protectionism version 2025 could thus reshape the balance of global trade.

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Ariela R. avatarAriela R. avatar

Ariela R.

My name is Ariela, and I am 31 years old. I have been working in the field of web writing for 7 years now. I only discovered trading and cryptocurrency a few years ago, but it is a universe that greatly interests me. The topics covered on the platform allow me to learn more. A singer in my spare time, I also cultivate a great passion for music and reading (and animals!)

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.





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