Author: Megha Bahree
Published on: 31/03/2025 | 00:00:00
AI Summary:
US is no longer a beacon of free market trade, experts say. On Wednesday, Trump announced 25 percent tariffs from this Thursday on all cars, light trucks and auto parts imported into the US. It is not clear whether the tariffs will go into effect as laid out in Trump’s latest announcement. Bringing manufacturing back to the US will lead to higher sticker prices, hitting demand. AEG estimates tariff proposals floated by Trump in February would raise the price of a car assembled in the US, Canada and Mexico from $4,000 to $10,000 for most vehicles. In North America, the US and Canadian auto industries have been broadly integrated since the 1965 signing of a pact that facilitated duty-free movement of vehicles and parts. Over the years, the three countries have built up specialisations for certain auto parts, partly driven by costs. For a vehicle made in Canada, half the parts would come from the US, and for one made in Mexico, 30 percent to 35 percent of its parts would be from US on average. Trump’s pledge to impose “reciprocal” tariffs on all countries and specific duties on Canada and Mexico over their alleged failure to stem the flow of fentanyl and undocumented immigrants into the US. Some of Trump's claimed rationale for the tariffs is based on “false” information.
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