US President Donald Trump announces new tariffs on overseas automotives: In his latest announcement, US President Donald Trump plans to levy a 25% tariff on cars not manufactured in the country. This is part of a broader series of “reciprocal tariffs” on its trade partners, on April 2, a day dubbed by the President as “Liberation Day.” This has left countries will large automotive manufacturing bases and major US trade partners Mexico, Canada, Japan and the EU scrambling to negotiate exemptions to the tariff.

However, uncertainty remains over whether these tariffs will be fully implemented as the administration has repeatedly announced similar policies only to reverse them soon after.

Comment: Trump’s tariffs, while intended to hurt foreign manufacturers, will have a greater impact on US consumers who will be forced to face the brunt of the increased cost of tariffs. This move will also hurt US manufacturers as many rely on supply chains across Canada and Mexico under NAFTA. These tariffs come as part of the Trump administration’s desire to project US strength through its trade policy and return manufacturing to the country to appease its largely rural voter base, impacted by manufacturing job losses.  Foreign governments will be eager to negotiate for tariff exemptions and protect their national automotive manufacturers. This is also likely to bring further uncertainty to global supply chains and US markets. It is also likely that this policy is rescinded shortly after being announced as the administration has made repeated announcements only to cancel the days after. End