'Very direct attack': Trump imposes 25 percent tariff on foreign cars, world leaders push back

The White House expects the tariffs to raise USD 100 billion of annual revenue, but their effect would be multifaceted, considering that American automakers depend on international supply chains. As tax increase approaches in April, manufacturers might encounter higher costs and falling sales. Yet, Trump argues the action will provoke more factory establishments in the US.

Trump's announcement on increased tariff

 "What we're going to be doing is a 25 per cent tariff on all cars that aren't manufactured in the United States. This is going to be permanent," Trump announced in the Oval Office. This is going to be permanent," Trump declared in the Oval Office. "We begin at a 2.5 per cent base, which is where we are, and rise to 25 per cent." He asserted the action would spur economic growth, continuing, "This will keep on fueling growth like you've never seen before. But if you manufacture your car in the United States, there is no tariff".

How other countries reacted?

Canada:

Newly- elected Prime Minister Mark Carney delivered a stern criticism, calling Trump's auto tariffs a "direct attack" on Canada and threatening economic consequences for American consumers. "This is a very direct attack. We will defend our workers. We will defend our companies. We will defend our country," Carney said. He also said Canada would study the specifics of Trump's executive order before contemplating countermeasures. Describing the tariffs as "unjustified," Carney stated that he would exit the election campaign to lead a special Cabinet committee for US relations in Ottawa.

Japan:

Prime Minister Shigeru Ishiba did not exclude countermeasures against the tariff, stressing Japan's sizeable economic contributions to the United States."We have to look at proper measures, and of course, all possibilities are on the table," Ishiba said in parliament on Thursday. "The bottom line is that we have to think about what will be best for the national interests of Japan".Pointing to Japanese investments in the US automobile industry, Ishiba emphasized that Japanese firms offer jobs and high salaries, and it would be unreasonable to slap blanket tariffs."We need to make a clear statement that it is not appropriate to treat all nations alike," he added.

European Union:

The European Commission also responded, saying an immediate assessment of the possible economic effects of the tariffs would be undertaken and broader implications threatened."As I previously stated, tariffs are taxes which are  unhealthy for companies, unhealthy for consumers alike in the US and in the European Union," European Commission President Ursula von der Leyen said.United Kingdom: UK automotive industry association, Society of Motor Manufacturers and Traders (SMMT), condemned Trump's tariffs, warning that they will damage businesses and consumers on both sides of the Atlantic.

SMMT chief executive Mike Hawes said the action was "disappointing" but "not unexpected", calling it a blow to the historic UK-US trading relationship.Autos Drive America, which speaks for non-US carmakers, shared similar concerns. "These tariffs will increase production costs, reduce consumer choice, and harm American manufacturing jobs," said Jennifer Safavian, president of the organization. The European Commission will consider countermeasures in the next few days, as the bloc has always been tough against the protectionist approach of the US.