We are signing a presidential decree today that will lead to enormous growth in the automotive industry, he says in front of cameras at the White House.
The administration expects the tariffs to generate $100 billion in annual tax revenue.
Trump had previously announced that the sweeping tariffs against other countries he had previously threatened would be rolled out on April 2. A day he now refers to as "USA's Liberation Day".
They will apply to all countries and we will be very soft. I think people will be very surprised.
"Deeply regretful"
Ursula von der Leyen "deeply regrets" the US decision to impose tariffs on European car exports.
"As I have said before, tariffs are taxes – bad for businesses, worse for consumers in both the US and EU", she says in a written statement.
She adds that the union will continue to seek solutions through negotiation, while "defending its economic interests".
Canada's Prime Minister Mark Carney reacts with anger to the introduction of import tariffs on cars, calling it a "direct attack" on his country, reports AFP.
"We will defend our workers. We will defend our companies. We will defend our country. And we will defend it together", says Carney.
New factories
The American automotive industry can also be hard hit by the tariffs.
In early March, the White House gave the major American car manufacturers a month's exemption from the 25-percent tariffs on goods from Canada and Mexico.
This followed negotiations between the government and the American manufacturers, who have significant production of vehicles and components in the two neighboring countries.
Now Trump hopes that the new tariffs will lead to the construction of more factories in the US and an end to the "ridiculous" production chain that stretches into neighboring countries.
The American car giants are taking a hit on the New York stock exchange. About an hour after Trump's announcement, General Motors had fallen 6.9 percent, Ford 5.1 percent, and Stellantis 4.7 percent.
Volvo Cars had fallen 4.5 percent on the Stockholm stock exchange before the announcement.
