(NewsNation) — President Donald Trump has instructed U.S. automakers not to raise car prices in response to tariffs for cars not made in the United States that are set to take effect next week, a White House official told NewsNation.
Automakers are free to decide whether to follow the president’s guidance, the official said.
How Trump’s auto tariffs could yield surge in used car sales, prices
Trump announced earlier this week that his administration would impose a 25% tariff on cars not made in the United States. The White House said these tariffs will produce more than $100 billion in new annual tariff revenue. These tariffs will be in addition to any current tariffs.
“What (Trump is) doing is acknowledging that there are costs to bear,” the official told NewsNation. “The company should be able to eat the cost and not pass it down to the American people.”
The new auto tariff will start on April 2, and Trump told reporters this week that the U.S. would begin collecting on the tariffs a day later.
“This will continue to spur growth,” Trump said this week, adding that if manufacturers’ cars were built in the U.S., they would not be subject to the new tariff. Trump said that the auto tariffs will be permanent.
Trump said tariffs on imported cars will start at the current rate of 2.5% and will increase to 25%. He said the tariffs would not be charged on U.S.-made parts even if the cars were assembled abroad. Trump told reporters that businesses are returning to the United States to avoid paying tariffs.
Trump told reporters has has spoken with representatives from the big three automakers and said their response varied depending on whether they have manufacturing plants in the United States. He said that automakers who do not have plants here will “have to get going and build them” or they’re going to pay tariffs.
Trump said he expects automakers to move their parts divisions back to the U.S. due to the tariffs. The president said the move would incentivise companies to build plants in the United States said believes that “our automobile industry will flourish like it’s never flourished before.”
“(The president) is realizing that the actions he’s taking are going to bear fruit like they did in the previous administration,” the official told NewsNation.
