US Implements 25% Car Tariffs to Boost Domestic Production

USA's President Donald Trump is introducing 25-percent tariffs on all vehicles and vehicle components manufactured outside the USA from April 3 and May 3, respectively. This is not a negotiating tactic. They mean business in their attempt to strengthen car production in the USA, says US economist Elisabet Kopelman.

» Published: March 27 2025

US Implements 25% Car Tariffs to Boost Domestic Production
Photo: Lars Pehrson/SvD/TT

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In front of cameras at the White House, USA's President Donald Trump signed a presidential decree regarding the new tariffs.

We are signing a presidential decree today that will lead to enormous growth within the automotive industry, he said.

There have been several statements earlier from Donald Trump regarding tariffs, but the statements have so far been perceived as partly negotiating tactics.

Tariffs cause problems

But this time, US economist Elisabet Kopelman believes it's a serious situation.

It shows that he continues to escalate this trade war and that he means business, and it will be much more comprehensive than during his first term, says Elisabet Kopelman.

She says that the tariffs will cause problems, not only for car and component manufacturers outside the USA, but also for the American automotive industry, which has close collaborations with both Canada and Mexico, also affected by the new tariffs.

It causes problems for American car manufacturers. The long-term goal is to encourage manufacturers to produce cars in the USA. The companies that already have a factory in the country have the opportunity to increase their production there and gain better competitiveness than those who import, says Kopelman.

"Following the development"

According to Kristin Boldemann Wester, global PR chief for Volvo Cars, the company is following the development.

"We are currently examining the effects of the changes announced by the American government. It's too early to comment further at this stage", writes Boldemann Wester in a comment to TT.

Corrected version: With the correct date for when the tariffs come into effect.

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By TTEnglish edition by Sweden Herald, adapted for local and international readers

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