Watch: Trump announces a new 25% price on imported cars

Washington President (AP), Donald Trump, said on Wednesday that he placed 25% of car prices, a move that white house affirmations would promote national manufacturing but could also put financial compression on car manufacturers that depend on world supply chains.

Look at Trump's comments in the player above.

This will continue to stimulate growth, Trump told journalists. We will effectively charge a price of 25%.

The prices, which the White House expects to increase $ 100 billion in income per year, could be complicated because even American car manufacturers get their components from around the world. The increase in taxes starting in April means that car manufacturers could cope with higher costs and a drop in sales, although Trump maintains that prices will lead to the opening of more factories in the United States and at the end of what he deems a ridiculous supply chain in which the automotive parts and finished vehicles are made in the United States, Canada and Mexico.

Read more: how this American border city is struggling with Trumps Trade War with Canada

To underline his seriousness, said Trump, it's permanent.

General Motors' shares fell by around 3% in trade on Wednesday. Ford's stock was slightly up. The actions of Stellantis, the owner of Jeep and Chrysler, dropped by almost 3.6%.

Trump has long said that prices against automotive imports would be a decisive policy of his presidency, betting that the costs created by taxes would result in more production of production in the United States while helping to reduce the budget deficit. But American and foreign car manufacturers have factories around the world to adapt to global sales while keeping competitive prices and this could take years to companies to design, build and open the new factories that Trump promises.

“Locked much higher prices of vehicles,” said economist Mary Lovely, a senior scholarship at the Peterson Institute for International Economics. Was going to see a reduced choice.

She said more households will be sheltered from the new cars market where prices on average around $ 49,000 and will have to hang on to aging vehicles.

The prices on cars would begin to be collected on April 3, said Trump. If taxes are fully transmitted to consumers, the average automotive price could drop by $ 12,500, a sum that could fuel overall inflation. Trump returned to the White House after losing the elections in 2020 largely because voters thought he could reduce prices.

While Trump announced the new prices, he said he would like to provide a new incitement to help car buyers allowing them to deduct from their federal taxes on interest paid on car loans, as long as their vehicles have been manufactured in America. This deduction would eat in some of the income that could be generated by prices.

Automobile prices are part of a broader reshaping of global relations by Trump, which plans to impose what he calls reciprocal taxes on April 2 which would correspond to the prices, the sales taxes billed by other nations.

Trump has already placed an import tax of 20% on all imports from China for its role in the production of fentanyl. He also placed 25% prices on Mexico and Canada, with a tax less than 10% on Canadian energy products. Some prices in Mexico and Canada have been suspended, including cars taxes, after car manufacturers have opposed and Trump responded by giving them a 30 -day stay that should expire in April.

The president also imposed 25% prices on all imports of steel and aluminum, removing the exemptions from his previous taxes on metals. It also provides prices on computer fleas, pharmaceutical drugs, wood and copper.

Its taxes are likely to trigger a wider world trade war with the climbing of reprisals that could crush world trade, potentially injuring economic growth while increasing the prices of families and businesses, because some of the tax costs are passed on by importers. When the European Union retaliated with plans for a 50% rate on American spirits, Trump responded by planning a 200% tax on EU alcoholic drinks.

Trump also intends to place a 25% rate on countries that import Venezuela oil, even if the United States also imports the oil of this nation.

Trump assistants argue that prices in Canada and Mexico aim to stop illegal immigration and drug addict. But the administration also wants to use pricing income to reduce budget deficit and assert American pre -eminence as the largest global economy.

The president quoted on Monday the plans of the South Korean car manufacturer Hyundai to build a steel factory of $ 5.8 billion in Louisiana as proof that the prices would bring back manufacturing jobs.

According to the Bureau of Labor Statistics, more than a million people are employed in the country in the manufacture of motor vehicles and parts, or around 320,000 than in 2000, according to the Bureau of Labor Statistics. 2.1 million additional people work at Auto and Partn Crowerships.

Last year, the United States imported nearly 8 million light cars and trucks worth 244 billion dollars. Mexico, Japan and South Korea were the main sources of foreign vehicles. Imports of car parts have reached more than $ 197 billion, led by Mexico, Canada and China, according to the trade department.

The Associated Press writer, Paul Wiseman, contributed to this report.

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