Friday Briefing: Trump’s New Tariffs Risk Trade War

Trump’s car tariffs increased the risk of a trade war

President Trump’s plan to impose a 25 percent tariff on cars and parts imported into the U.S. sent a shudder through the global car industry. Markets in Asia, Europe and the U.S. wobbled yesterday as many automakers’ stock prices fell.

Trump announced the tariffs on Wednesday and then raised the stakes yesterday by threatening to target the E.U. and Canada if they banded together to retaliate. Talk of retaliatory measures increased the likelihood of a worldwide trade war.

The tariffs on all cars and some auto parts exported to the U.S. are set to go into effect on April 3. Mexico, Japan and South Korea, along with Canada, account for about 75 percent of U.S. vehicle imports. Here’s how major car brands will be affected by Trump’s tariffs.

Reactions: Mark Carney, Canada’s leader, said that the U.S. was “no longer a reliable partner” and that his country would announce its own retaliatory tariffs next week. In Germany, which has an auto industry that is a huge exporter to the U.S., the economy minister, Robert Habeck, said it was “crucial that the E.U. delivers a decisive response to the tariffs,” adding, “It must be clear that we will not back down.”