Trump's 25% tariff on cars made outside the US has sent the stock market crashing again

The US President has announced a 25% tariff on all cars manufactured outside the US, starting on April 2, which Trump has called “Liberation Day”. On the same day, he plans to announce mirror tariffs against the country’s trading partners, and they will apply to all countries, and not just those with the largest trade deficits with the US, as previously reported by the media. Trump promises that “these tariffs will be very soft, and in some cases even lower than the current ones, which will surprise many.”

Even cars containing American parts will fall under the new tariffs if they are assembled abroad, and customs rates (starting at 2.5%) will be introduced in addition to the current ones.

The statements sent U.S. stocks and stock indexes lower as the market hoped for another delay or rollback of tariffs. On Wednesday, the S&P 500 fell 1.12%, the Dow Jones Industrials fell 0.31% and the Nasdaq 100 fell 1.83%, all but erasing the previous week's gains.

European Commission President Ursula von der Leyen called the move “bad for business, and even worse for consumers,” while Canadian Prime Minister Mark Carney called it a “direct attack” on Canadian workers. “We will protect our workers, our companies, our country, and we will protect it together,” Carney told reporters in Ottawa.

“Tariffs will not be imposed on USMCA-compliant automotive parts until the Secretary of Commerce, in consultation with U.S. Customs and Border Protection (CBP), develops a process for applying tariffs to non-U.S. content,” the White House’s first deputy press secretary told X.com. Ahead of Trump’s announcement, shares of U.S.-listed automakers fell on expectations of a shock to the global auto industry, which is already reeling from Trump’s tariff threats and periodic tariff rollbacks.

New tariffs on cars will increase their cost by thousands of dollars, reducing new car sales and jobs because the U.S. auto industry relies heavily on imported parts.

The fall in stock indices is likely to continue next week as US trade policy could undermine the economy and increase inflation.

Democrats are increasing pressure on the new Trump Administration, which is constantly embroiled in scandals due to incompetence (such as discussing secret plans in an open group on the Signal messenger), and are threatening to block the government when the US debt ceiling needs to be reviewed again in June, which could lead to a default and economic crisis.

The slowdown in the US economy due to trade wars and disruptions in supply chains will lower the prices of oil and other commodities, so traders are cautiously buying raw materials and preferring gold.

Prices for agricultural commodities will also remain under general pressure, so a sharp speculative increase in quotations should not be expected in the coming months.