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President Trump will announce auto tariffs during a news conference on Wednesday afternoon, Karoline Leavitt, the White House press secretary, said during a briefing with reporters at the White House.
Details of the tariffs remain unclear, including whether they will apply broadly to all imports of cars and car parts, or be more narrowly tailored.
Tariffs could encourage auto companies to set up more factories in the United States, a primary goal for Mr. Trump. But depending on how broadly they are imposed, tariffs could also disrupt supply chains for carmakers, chill their investments and significantly raise costs for consumers.
The measure could also spark more trade clashes with foreign countries, particularly European nations, Japan and South Korea, whose companies send many cars to the United States.
Mr. Trump has argued that tariffs will help revive American manufacturing, but some industry executives and analysts have warned that the measures could backfire. If automakers see the cost of their components go up too much, for example, that could shrink their profits and dissuade them from making new investments. Nearly half of all vehicles sold in the United States are imported, and almost 60 percent of the parts in vehicles assembled in the United States are imported, according to data from the Wall Street research firm Bernstein.
Here’s what else to know:
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Investor reaction: Stock markets fell on news that the auto tariffs would be implemented, with shares in American automakers declining. The S&P 500 was down more than 1 percent in early afternoon trading. Most auto stocks were down around 2 percent.
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Other tariffs: The car tariffs would come in addition to other expansive tariffs Mr. Trump has introduced in recent months. Since coming into office, Mr. Trump has added an additional 20 percent tariff to all U.S. imports from China. He also imposed a 25 percent tariff on almost all goods from Canada and Mexico, before exempting roughly half of those imports, for the goods that trade under the rules of the North American trade agreement. Mr. Trump plans to introduce further levies on April 2, when he has said he will announce “reciprocal tariffs” that match the high tariffs and other trade barriers that other countries impose on American exports.
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Rising costs: Ken Kim, a senior economist at KPMG Economics, said in a note Wednesday that he had seen a “sizable jump” in orders for vehicles and parts in February, as the car industry put in more orders before tariffs on steel and aluminum would come into effect. He cited industry estimates saying that the price of a new vehicle would increase by several thousand dollars — perhaps more than $10,000 — because of tariffs.
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