Trump imposes 25% tariff on imported cars: 'This is permanent'

WASHINGTON -  President Donald Trump said Wednesday he was placing 25% tariffs on auto imports, a move the White House claims would foster domestic manufacturing but could also put a financial squeeze on automakers that depend on global supply chains.

The tariffs, which the White House expects to raise $100 billion in revenue annually, could be complicated as even U.S. automakers source their components from around the world. The tax hike starting in April means automakers could face higher costs and lower sales, though Trump argues that the tariffs will lead to more factories opening in the United States and the end of what he judges to be a "ridiculous" supply chain in which auto parts and finished vehicles are manufactured across the United States, Canada and Mexico.

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What they're saying:

"This will continue to spur growth," Trump told reporters. "We'll effectively be charging a 25% tariff."

To underscore his seriousness, Trump said, "This is permanent."

Trump’s tariff plans on automobiles

The backstory:

Trump has long said that tariffs against auto imports would be a defining policy of his presidency, betting that the costs created by the taxes would cause more production to relocate in the United States. But U.S. and foreign automakers with domestic plants still depend on Canada, Mexico and other nations for parts and finished vehicles, meaning that auto prices could increase and sales could decline as new factories take time to build.

RELATED: What companies are saying about tariff price hikes: Full list

Trump's tariffs plans

Dig deeper:

Beginning April 2, President Donald Trump has plans to reveal reciprocal tariffs on certain sectors, but has softened his approach, saying that while he wants to charge reciprocal rates, the U.S. "might be even nicer than that."

The Trump administration has argued that these tariff actions will help revive domestic manufacturing and create more jobs for the United States, despite warnings from economists about potentially worsening inflation and hindering growth.  

Trump has deemed April 2 as "LIBERATION DAY."

"For DECADES we have been ripped off and abused by every nation in the World, both friend and foe. Now it is finally time for the Good Ol' USA to get some of that MONEY, and RESPECT, BACK. GOD BLESS AMERICA!!!" Trump wrote on Truth Social.

Not all levies would be imposed on April 2 and some countries may actually get breaks, but one White House official confirmed the president is going full-steam ahead on his plans for reciprocal tariffs.

What tariffs have been imposed so far? 

Dig deeper:

So far, the president has imposed 20% tariffs on Chinese imports, 25% on global steel and aluminum imports and 25% tariffs on imports from Canada and Mexico that don’t comply with a North American trade agreement over the U.S. fentanyl crisis.

What's next:

Trump is expected to impose tariffs on semiconductors, pharmaceuticals and copper imports as well.

Why you should care:

Experts say consumers and businesses will be the hardest hit. Companies big and small will face higher costs on the goods they buy from other countries — and could have little recourse but to hike prices themselves. For consumers, that will likely mean more expensive price tags on everything from cars, appliances and other big-ticket items to smaller, everyday purchases including electronics, gasoline and groceries.