Trump Announces 25% Tariff on Imported Cars and Auto Parts in the U.S.

U.S. President Donald Trump had imposed a 25% tariff on imported foreign cars and auto parts, which has raised concerns of a rise in global trade tensions.

The new tariff will take effect on April 2, and car importers will be required to pay more taxes from that date onwards. The tariffs on auto parts, however, will be implemented later, perhaps in May or beyond.

Trump insisted that this move would greatly help the U.S. automobile industry and help generate employment. Trump noted that imposition of these tariffs would promote in-house manufacturing and develop the economy at the national level.

But specialists warn that this move will temporarily stop car production in the U.S., increase the price of cars, and strain world trade relations.

The U.S. bought nearly eight million cars in the last year, which was approximately $240 billion—nearly half of the country's total automobile trade.

Mexico is the biggest foreign supplier of cars to the US, followed by South Korea, Japan, Canada, and Germany. Specialists estimate that Trump's new tariff proposal would hurt international car trade and supply chains.