(NewsNation) — President Donald Trump announced Wednesday that his administration will 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 revenue. These tariffs will be in addition to any current tariffs. The new auto tariffs will start April 2, Trump said: “We will start collecting on April 3rd.”
Trump told reporters, “this will continue to spur growth.” He said if manufacturers build their cars in the U.S., there will be no tariff.
Tariffs have been a cornerstone of Trump’s economic policies, but he has announced and then paused them multiple times.
Trump says tariffs on imported cars will start at the current rate of 2.5% and increase to 25%. He said the tariffs would not be charged on U.S.-made parts even if assembled abroad.
The move is likely to hit Japan, South Korea and Germany particularly hard.
The president also said the U.S. will be imposing tariffs on pharmaceuticals “in order to bring our pharmaceutical industry back.”
He also announced new tariffs to be imposed on lumber. The president has also imposed 25% tariffs on all steel and aluminum imports, removing the exemptions from his earlier 2018 taxes on the metals. He also plans tariffs on computer chips, pharmaceutical drugs, lumber and copper.
The stock market has reacted negatively to the uncertainty, with stocks dipping as tariffs are announced.
Earlier in March, Trump announced he would give automakers a one-month reprieve from 25% tariffs on Canada and Mexico. Major car manufacturers had asked for the delay because the cost of tariffs would make them less competitive.
Though Trump has repeatedly insisted that foreign countries pay for tariffs, the cost is borne by U.S. importers, who usually pass it on to consumers through higher prices.
Economists warn that tariffs could worsen inflation, and consumer confidence has taken a dive amid the stream of tariff announcements and delays.
The Associated Press contributed to this report.