On March 26, U.S. President Donald Trump signed an executive order at the White House. The order places a 25% tariff on all imported cars. This new rule will officially take effect on April 2.
Trump Says the Tariff Is Permanent
Trump made it clear: the car tariff is not temporary. It will remain in place indefinitely. According to him, there’s one simple way to avoid paying the tax—build the cars in the United States.
The President also brought up Elon Musk, CEO of Tesla. Trump noted that Musk did not ask for the tariff. He also didn’t request any special favors in return. 
New Tariffs Will Also Hit Lumber and Medicine
In addition to cars, Trump announced more tariffs are coming. The U.S. will impose new taxes on imported lumber and pharmaceutical products. However, details like the start date and specific rates are still unclear.
One-Month Grace Period for Auto Parts
A separate notice provided more information about auto parts. The 25% tariff on imported cars will begin at 12:01 a.m. Eastern Time on April 3.
However, imported car parts won’t be taxed right away. The government will allow a grace period of up to one month. The exact start date will be listed in the Federal Register, but it won’t be later than May 3, 2025.
Once the tariff starts, it will remain active. It can only be changed, reduced, or canceled through official action.
Some Car Parts Temporarily Exempt Under USMCA
Details from the White House
White House spokesperson Harrison Fields explained more about how the new tariffs will work. The 25% tax will apply to imported passenger cars and light trucks. It will also affect key components like engines, transmissions, powertrain parts, and electric systems.
Fields added that other parts might be included later if needed.
Some car parts will stay tariff-free, at least for now. Those that meet the rules of the United States–Mexico–Canada Agreement (USMCA) won’t be taxed yet. This temporary exemption will last until the Secretary of Commerce holds talks with U.S. Customs and Border Protection.
Canada Hints at Retaliation
Canadian Prime Minister Justin Trudeau quickly responded to the announcement. He said Canada will not stay silent. The country is preparing a response to the new U.S. tariffs and may introduce its own retaliatory taxes.
Trudeau described the car tariff as a direct attack on Canadian workers. He also said he expected to speak with Trump very soon about the issue.
