Washington: In a move that could threatens to intensify the global trade war, US President Donald Trump has announced new import taxes of 25% on cars and car parts coming into the US. The US President said the latest tariffs would come into effect on April 2, while charges on businesses importing vehicles will start the next day. Charges on parts are set to start in May or later, reports claimed. The hike in tariff on imported cars has triggered speculations and raised questions as to whether the move was taken to favour Elon Musk’s automobile business? Was the decision influenced by Elon Musk, who remains at the helm of Tesla, an American manufacturer of electric automobile?
Here’s what Trump says
Well, President Trump has declined such speculations. Trump clarified that the Musk—who is also the chief of Department of Government Efficiency (DOGE)— had no involvement in shaping the auto tariff policy. “Musk did not advise on auto tariffs,” he said. “He has never asked me for a favour,” Trump claimed, in his response to a reporter’s question.
“Build your car in US, there is no tariff…”
“What we’re going to be doing is a 25 per cent tariff on all cars that are not made in the United States. This will be permanent,” Trump said in the Oval Office. “We start off with a 2.5 per cent base, which is what we’re at, and go to 25 per cent.” He claimed the move would drive economic growth. “This will continue to spur growth like you haven’t seen before. But if you build your car in the United States, there is no tariff,” he added.
Trump also mentioned that he had consulted major automakers about the policy. He asserted that the tariffs would be “net neutral or maybe good for Tesla”. The announcement comes barely a few days before Trump is expected to unveil a broader set of trade initiatives. According to reports, on April 2—that Trump has dubbed “liberation day”—the US President is set to introduce a wide range of so-called reciprocal tariffs. Such tariffs will target imported goods, allegedly ‘unfairly taxed by US trading partners.’
What did Tesla chief Musk say?
Tesla CEO Elon Musk has said that the tariffs would negatively affect Tesla too. He emphasised that the effect will be significant.
Today, Trump introduced a 25% tariff on ALL vehicles not made in the United States. This tariff will go into effect on April 2nd. About 40% of all new cars sold in the US are imported, so this tariff is a big deal.
This is a breakdown of where cars sold in the US are made:
•… pic.twitter.com/4afYiJvtph— Sawyer Merritt (@SawyerMerritt) March 26, 2025
Tesla and other automakers usually purchase headlamps, automotive glass, brakes, body panels, suspension parts, and printed circuit boards for various electrical systems in their vehicles from suppliers in Mexico, Canada and China.
Trump & Tesla moments
Earlier this month, Trump turned the South Lawn of the White House into a temporary Tesla showroom, the CNN reported. The company delivered five of its electric vehicles there for Trump to inspect. On his social media account Truth Social, Trump had declared that he would buy a Tesla to show support for Musk and the business. Musk stood by his side while Trump called the vehicles “beautiful.” The US President had also praised the unorthodox design of the angular, steel Tesla Cybertruck.
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BREAKING: TRUMP SITS DOWN INTO $TSLA MODEL S 👀
He says it’s beautiful !
— TheSonOfWalkley (@TheSonOfWalkley) March 11, 2025
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#Trump admires his beautiful new #tesla he bought to support #ElonMusk pic.twitter.com/ohnlGIrb5h
— Hazel Khan (@hazel_khan8) March 25, 2025
