President Donald Trump's announcement of upcoming auto tariffs garnered mixed reaction.
The White House says the 25% tariff on all cars not made in the U.S., and some foreign-made car parts will encourage automakers to make their cars in America. The United Auto Workers called the decision a "victory."
"These tariffs are a major step in the right direction for autoworkers and blue-collar communities across the country," UAW president Shawn Fain said in a statement. "It is now on the automakers, from the Big Three to Volkswagen and beyond, to bring back good union jobs to the U.S."
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Around the world, however, the tariffs announcement is fueling anger. Canada's prime minister called it an "attack."
"This will hurt us," Canadian Prime Minister Mark Carney said. "But through this period, by being together, we will emerge stronger."
Cars are Canada's second largest export, and Carney said the auto industry employs 125,000 Canadians directly. Japan's Prime Minister Shigeru Ishiba said he's "considering all options" in response to the tariffs. A German auto lobby group called the decision a "disastrous signal" for free trade.
"(The tariffs) place a significant burden on both companies and the automotive industry's closely interwoven global supply chains — with negative consequences especially for consumers, also including those in North America," VDA president Hildegard Müller said in a statement.
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The decisions could have global ripple effects for the industry and consumers. The U.S. imported over 8 million passenger vehicles and light trucks last year, according to the International Trade Administration.
The White House hopes tariffs spur auto companies to produce more cars domestically. On Monday, South Korean automaker Hyundai announced plans to invest $21 billion in the U.S. through 2028, including building a steel plant in Louisiana.
"This will continue to spur growth like you haven't seen," Trump said on Wednesday.
Even though these tariffs will target foreign-made cars, American automakers cars could feel the impact, too. Many of the parts used in American cars are sourced from other countries. Last year, the U.S. imported over $197 billion worth of car parts.
