Who will new round of tariffs affect?
Autos, Canada, Mexico, Venezuela are targeted
By: Michael Loria
UAS Today
..... Tariffs on goods from Canada and Mexico the next. Now it's cars.
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In his first months in office, President Donald Trump has at times gone heavy on tariff talk and then occasionally scaled back on tariffs - essentially, taxes on imports.
..... Trump told reporters in the Oval Office on Wednesday [03/26/2025] he will put tariffs on automobile imports next. he also announced plans this week [03/26/2025] to impose tariffs on countries that deal with Venezuela.
..... The president;s announcements this week [03/26/2025]
mark a significant change form earlier in the month [03/2025] when he backpedaled on plans to impose tariffs on goods from Mexico and Canada amid consumer anxiety and falling stock prices.
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Trump's tariffs gambit has proved dizzying to follow. As the president announces new plans to raise tariffs on automobile imports, here's what to know about who will be affected and when.
Intentions, possible consequences
..... Tariffs have historically been sue dot bolster domestic industry by making sure foreign manufacturers can't sell goods in the country at prices that undercut American manufacturers.
..... The tax policy was widely used throughout the 19th century in America and even though the mid-20th century. But tariffs have fallen out of fashion in recent decades as many economists say that ultimately costs from tariffs are passed on to consumers.
..... Some countries still use tariffs to bolster select industries, and some countries impose tariffs on American imports disproportionately to the degree ti which the U.S. taxes there goods.
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Trump and Vice President JD Vance have argued leveling tariffs on a broad set of industries will boost the nation's declaring manufacturing sectors.
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Trump campaigned on a promise to use tariffs to bolster American manufacturing - auto making in particular - and on Wednesday [03/26/2025] he announced plans to impose tariffs on automobile imports. the president told reporters tariffs on auto imports will start at 2.5% and rise to 25%.
..... "we're going to charge countries for doing business in our country and taking jobs, taking our wealth, taking so much out of our country," Trump said. "This is very modest."
.... Some experts worry raising tariffs won't work as intended.
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In a Wednesday [03/26/2025] morning sales forecast call, Cox automotive chief of economist Jonathan Smoke said massive increases in tariffs would be "highly disruptive: to North American vehicle production, potentially lading to tighter supply, higher prices and a "much weaker economy."
..... Without carve-outs for automobiles and parts, Smoke said the auto market could be facing the highest effective tariff are since World War II.
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Costs to make a vehicle assembled in Canada and Mexico could go up $6,000 for more, he said, while higher costs for parts could increase production costs for U. S.-made vehicles by roughly $3,000.
..... The U.S. imported $474 billion worth of automotive cars worth of automotive products in 2024, including passenger cars worth 4220 billion. Mexico, japan, south Korea, Canada and Germany, all close U.S. allies,ere the biggest suppliers.
Stocks fall after announcement
..... U.S. stocks tumbled in after-hours trading Wednesday [03/26/2025] after the tariffs announcement. Futures contracts tied to the broad S&P 500 index were down more than 1%, which those linked to the tech-heavy Nasdaq were off nearly 2% in the late afternoon.
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Automaker stocks were also lower: General Motors Company shares lost nearly 5%, and shares of Ford Motor Company, the only major U.S. car-maker to end the trading day higher, were more than 2% lower.
..... Stocks have been on a roller-coaster ride as Trump has announced, then walked back, rounds of tariffs over the past several weeks. Consumer sentiment has also been batted, and inflation expectations have spiked, concerning some Federal Reserve members.
Next up: Reciprocal tariffs
..... Reciprocal tariffs - taxes on imports equal to the tariffs other countries place on American goods - are among the next expected to go into place.
..... Trump has promised reciprocal tariffs will take effect April 2, [2025]
offsetting trade practices the administration considers unfair.
..... "They charge us, and we charge them," Trump said in announcing plans for the tariffs.
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The president has talked about raising reciprocal tariffs in particulate as a way of getting even with the European Union.
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Tariffs on average are similar between the U.S. and E.U. according to a J.P. Morgan analysis. But the EU taxes certain imports far more than America does. For example, the EU imposes a 10% tariff on American autos, compared to just 2.5% for European cars coming into the U.S. the report says.
Using tariffs to send a message
..... The Trump administration has also taken to threatening tariffs as a sort of political cudgel.
..... Venezuela is the latest country at which Trump has taken aim.
.... On Monday, [03/24/2025] he promised to raise a 25% tariff on goods from any country that buys oil and gas from the South American country, which has some of the largest reserves in the world.
..... Trump views Venezuela as an enemy and said the tariffs are in retaliation for what he characterized as the country intentionally flooding the U.S. with gang members, He provided no evidence to support the claim. Also among the nations Trump has signed out for tariffs are the two biggest trading partners and neighbors of the U.S. Mexico and Canada. Trump has said the two countries don't do enough to curb the flow of migrants and illegal drugs into the U.S.
..... He has promised to sue tariffs to make them pay. So far he has not delivered on his threat, but tariffs are expected to take effect Wednesday. [04/02/2025]
..... tariffs of up to 25% will be raised on imports from Canada and Mexico that fall under the United States-Mexico-Canada Agreement. Imports form the two nations not covered by the USMCA already had 25% tariffs placed on them earlier in the month. [03/2025]