Tariffs on Most Autos to Begin Next Week; Trump Says Lumber Tariffs Come April 2
President Donald Trump said at the White House that tariffs on imported autos, now at 2.5%, will go to 25%. He then signed an executive order, but that order was not yet posted online. The staffer who presented that order said the 25% tariff would be added to existing tariffs.
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It wasn't completely clear when the new tariffs would start, as Trump both said that they would go into effect on April 2 and that they would start to be collected on April 3.
He made no mention of exempting cars made in Mexico, Canada or South Korea that meet the rules of origin for either USMCA or the Korea free trade agreement.
"If you build your car in the United States, there's no tariffs," he said.
He said the tariffs would be permanent.
He said nothing about tariff changes for auto parts or light trucks, which are already at 25%, unless they are assembled in Mexico or Canada, and meet the USMCA rules of origin. However, the staffer said there would be a 25% tariff on light trucks, in addition to existing tariffs.
The staffer said the change is expected to result in $100 billion in annual tariff revenue.
In response to a question from reporters, Trump said the value of U.S. auto parts in imported cars would be subtracted from the tariffs.
"If parts are made in America, those parts are not going to be taxed, and we'll have very strong policing," he said. However, he predicted that auto parts manufacturing would become localized.
He predicted that U.S. assembly plants would be quickly expanded. "I think our automobile business will flourish like it's never flourished before," he said.
In response to other questions, Trump said that tariffs on lumber would be among the tariff announcements on April 2.
With regard to the reciprocal tariffs, he said, "in many cases, it will be less than the tariffs they've been charging us for decades. We're trying to keep it somewhat conservative."
He predicted that people would be surprised at the numbers, and that they would be lower than people expect.