Trump tariffs latest updates: 25% tariffs on imported cars and car parts

President Donald Trump said Wednesday that he plans to impose 25 percent tariffs on all cars and auto parts imports into the U.S., a move he sees as bringing auto manufacturing jobs back to the U.S. — despite experts’ warnings that it could make car prices more expensive. 

The new duties will go into effect April 3, according to an executive order.

“I think our automobile business will flourish like it’s never flourished before,” Trump said from the Oval Office following the announcement. 

Americans purchased 16 million cars in 2024, and only 1 in 4 (25 percent) are what the White House categorizes as “made in America.” The Trump administration estimates that half of the cars that consumers purchased last year were imported, as were 60 percent of the parts used to assemble them, a White House fact sheet said. 

More than 1 in 3 vehicles and vehicle parts that the U.S. imported in 2024 came from Mexico, according to a Bankrate analysis of Census Bureau data. Another 13 percent each came from Canada and Japan, while South Korea composes 12 percent of all imports. 

United Auto Workers Union President Shawn Fain celebrated the news in a statement, calling it a “major step in the right direction” for both autoworkers and blue-collar communities in the U.S.

Economists, however, estimate that the tariff hike could amount to massive price hikes. New vehicle prices might rise by about $5,000, on average, over the next 12 months, according to one estimate from Moody’s. A separate report from analysts at Goldman Sachs estimated that the price of imported cars could jump from anywhere between $5,000 to $15,000 if the 25 percent levy is kept in place.

Those price hikes could add further insult to injury as Americans already grapple with the double whammy of soaring interest rates and pricey car costs post-pandemic. Since February 2020, new vehicle prices have climbed 20.5 percent, a Bankrate analysis of the latest consumer price index (CPI) shows. 

The average price of a new car hit almost $50,000 at the end of December, according to Kelley Blue Book. 

“Consumers are paying close attention to the current administration’s policies,”  said Oren Klachkin, financial market economist at Nationwide. “They are fearful another leg up in prices will put more strain on their wallets.”

The news about tariffs fluctuates every day. Stay tuned to Bankrate’s latest updates to keep informed about what it means for you — and your money.

25% tariffs on all goods from countries that import Venezuelan oil

On March 24, President Donald Trump signed an executive order lobbing 25 percent tariffs on all goods from any country that imports oil from Venezuela.

Meanwhile, new U.S. tariffs seem all but guaranteed to roll out on April 2. But the specifics — in terms of which countries, which products and how high the tariffs will be — are murky.  With tariffs, the only thing certain these days is the uncertainty. 

Last week, Trump seemed intent on rolling out steep tariffs in April against any country that had instituted retaliatory tariffs against the U.S., in addition to levying new tariffs on cars, aluminum and steel.

But on Monday, Trump softened his tone. “I may give a lot of countries breaks,” he said. “It’s reciprocal, but we might be even nicer than that.”

Still, he repeated his nickname for April 2, calling it “Liberation Day,” which refers to his belief that tariffs will free the U.S. from trade imbalances with global partners.

April 2 is also the day when the reprieve on certain goods from Canada and Mexico is slated to end, and 25 percent tariffs on many more products from those countries are scheduled to go into effect. Currently, any products covered by the U.S.-Canada-Mexico agreement are exempt from tariffs. 

In other news, consumers’ outlook for the future dropped to a 12-year low in March, according to the latest monthly consumer survey, fielded through March 19, from the Conference Board, a nonprofit, nonpartisan research organization.

Specifically, Americans’ short-term outlook for income, business, and labor market conditions tumbled lower.

“Consumers’ optimism about future income — which had held up quite strongly in the past few months — largely vanished, suggesting worries about the economy and labor market have started to spread into consumers’ assessments of their personal situations,” said Stephanie Guichard, senior economist, global indicators at the Conference Board, in a statement. 

Overall, consumer confidence “declined for a fourth consecutive month in March,” she said, “falling below the relatively narrow range that had prevailed since 2022.”

—Andrea Coombes, March 25, 2025

Tariffs ‘tend to bring inflation up,’ Fed Chair says

The Federal Reserve left interest rates unchanged at its meeting today, but Fed Chair Jerome Powell highlighted the risks tariffs pose for the economy going forward. 

Tariffs “tend to bring growth down; they tend to bring inflation up,” Powell said.

As a result of the Federal Open Market Committee’s (FOMC) decision today, its benchmark borrowing rate will stay in a target range of 4.25 to 4.5 percent.

Powell also said Trump’s latest tariffs are already driving some price increases: “We now have inflation coming in from an exogenous source,” Powell said, meaning an external source. 

In a statement, the FOMC said the economy has expanded and the labor market seems to be “solid,” but added that “uncertainty around the economic outlook has increased.”  

In a time of economic uncertainty, consumers should consider focusing on what they can control, says Sarah Foster, Bankrate’s principal U.S. economy and Federal Reserve reporter. Pay down high-interest credit card debt and do what you can to build up your emergency fund, Foster says.

—Andrea Coombes, March 19, 2025

Reciprocal tariffs, and more, coming April 2, Trump says

President Donald Trump isn’t backing down from an all-out trade war, saying he’ll launch new tariffs come April 2.

“April 2 is a liberating day for our country, because we’re going to be getting back a lot of the wealth that we so foolishly gave up to other countries,” Trump said to reporters on Air Force One on Sunday.

Some of the new tariffs planned for April 2 will focus on specific sectors while others will be reciprocal, meaning the U.S. will impose the same tariff that a country has imposed on the U.S., Trump said.

“If they’re charging us, we’re charging them,” he said.

On top of reciprocal tariffs, Trump said he plans to levy new tariffs on cars, steel and aluminum. “We’re going to have some additional tariffs” on those products, he said.

Trump ratcheted up his economic threats against the United States’ trading partners last week, and Canada and the European Union quickly hit back with their own retaliatory levies.

Tariffs have been a key part of Trump’s bigger goal of shifting the burden of funding the U.S. government from American taxpayers to foreign sources. As part of that broader effort, he proposed creating an External Revenue Service, focused on collecting tariffs and other revenue from other countries. Here’s what the External Revenue Service could mean for you.

—Andrea Coombes, March 18, 2025

Canada and Mexico economies to be hit hard by tariffs

Trump’s relentless trade war is expected to hit Canada and Mexico especially hard, but the U.S. economy will suffer too, according to the latest economic forecast, published Monday, by the OECD, or Organization for Economic Cooperation and Development, a global policy group of 38 member countries.

• Mexico’s economy will likely shrink 1.3 percent this year and contract 0.6 percent in 2026, a sharp drop from an expected growth rate of 1.2 percent this year and 1.6 percent in 2026, from the OECD’s forecast in December.
• Canada’s economy is expected to grow 0.7 percent this year and next, down from an expected 2 percent growth rate each of those years in the OECD’s previous forecast.
• The U.S. economy will grow 2.2 percent this year and just 1.6 percent next year, down from a predicted 2.4 percent growth rate in 2025 and 2.1 percent in 2026, according to the OECD.

The current U.S. tariffs on Canada and Mexico generally are 25 percent, though products that fall under the United States-Mexico-Canada Agreement (USMCA) are exempt for now. Tariffs on goods from China are 20 percent, on top of an already existing 10 percent tariff.

In response to the U.S.’s tariffs, Canada slammed 25 percent tariffs on a variety of U.S. products, including candles, garden umbrellas and fishing rods on March 13. Here’s the complete list of U.S. products upon which Canada imposed a 25 percent tariff.

Trump threatens 200% tariff on European alcohol

March has been a particularly volatile month in the burgeoning trade war. On March 13, Trump said on his social media site Truth Social that he’d hit all champagne, wine and alcohol coming from the European Union with a 200 percent tariff, in response to the EU’s planned 50 percent tariff on U.S. whiskey.

On March 11, in response to the U.S. imposing 25 percent tariffs on steel and aluminum products from the European Union, the EU said it would impose counter tariffs on almost $30 billion worth of U.S. goods, starting next month.

EU tariffs will hit products “ranging from boats to bourbon to motorbikes,” the EU statement says.

Other targeted products include steel and aluminum items, textiles, home appliances, house tools, plastics and wood products. Agricultural products include poultry, beef, certain seafood, nuts, eggs, dairy, sugar and vegetables.

The EU announcement said its tariffs would start April 1 and be fully in place by April 13.

What are tariffs?

A tariff is essentially a tax on imported goods. Governments choose to levy tariffs for a variety of reasons, including protecting domestic industries and punishing other countries for their trade practices.

Trump has talked about tariffs as creating a protective “ring around the U.S. economy” that could bring jobs back. He’s also mentioned national security as a reason to institute tariffs — for example, to push other countries to better guard against drug trafficking.

Tariffs can be levied in different ways, but often they are a simple flat percentage cost that applies to the goods being imported.

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Who pays tariffs?

Tariffs are paid by the company that imports the product. For example, U.S. tariffs on goods from Canada are paid by U.S. companies that import those goods. However, the company importing the product often passes the cost of tariffs along to the consumers who ultimately buy the product.

How much is passed along, though, depends on a variety of factors, such as competition in a specific industry, demand for the specific product and consumers’ preferences.

U.S. households will lose an estimated $2,700 to $3,400, on average, as a result of retaliatory tariffs, according to a recent analysis by the Yale Budget Lab. Before Trump announced plans for retaliatory tariffs scheduled for April 2, the Yale Budget Lab estimated that tariffs would cost U.S. households an average of $1,600 to $2,000.