President Donald Trump on Friday said that the next wave of his tariffs would impact automobiles. The American government has been imposing fresh duties on imports as Trump tries to push companies to move their production facilities to the US.
Speaking to reporters in the Oval Office as he signed an executive order on energy policy, Trump said, “We are going to do that on around April 2.” This decision marks the latest move in an escalating trade conflict as the president tries to deliver on his campaign promises to levy high tariffs on other countries, both friends and rivals, reported Bloomberg.
Impact Of Tariffs On Auto Industry
The threat of imposing tariffs on the auto industry will impact some of the biggest brands in South Korea, Germany, and Japan. Imports account for almost half of the US auto market, as of last year. According to Global Data, a market researcher, around 80 per cent of Volkswagen AG’s US sales were from imports, while 65 per cent of Hyundai-Kia’s US sales were imported.
However, the President didn’t disclose any details on the possible tariffs in the auto sector. It remains unclear how these will impact the vehicles built under a free trade agreement between the US, Canada, and Mexico. Notably, the agreement was renegotiated by Trump during his first term.
Industry groups have cautioned that the tariffs could damage the supply chain and result in hiking the prices, however, the exact details of the taxes are yet to be determined.
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Threat Of Reciprocal Tariffs
The announcement came a day after the President ordered his administration to develop plans to impose reciprocal tariffs on several trading partners. Trump says this measure is an attempt to address the system which he claims is unfavourable for the US.
The reciprocal taxes on countries that impose tariffs on goods imported from the US could be rolled out as soon as April. These will differ from the sectoral tariffs promised by the American President on autos and other industries such as pharmaceuticals, semiconductors, and energy.
Earlier this week, Trump said that he plans to impose a 25 per cent duty on steel and aluminium imports.
