Trump Administration Poised to Announce Auto Tariffs, Citing National Security Concerns

The Trump administration is preparing to justify imminent auto tariffs by leveraging an investigation completed during the president’s first term, according to industry experts and U.S. officials.

President Donald Trump indicated on Monday that long-promised tariffs on imported cars could be announced “in the next few days,” possibly before a broader set of reciprocal tariffs targeting the largest contributors to the U.S. trade deficit on April 2. While the White House has not provided an exact timeline or specifics on the tariff levels, an administration official suggested taking Trump “at his word” regarding the imminent announcement.

According to Bloomberg News, the announcement could come as early as Wednesday. A 25% tariff on auto imports—an amount Trump previously floated in February—would significantly disrupt the global automobile industry, which is already facing uncertainty from the administration’s unpredictable tariff policies. The Center for Automotive Research warns that such a tariff could increase vehicle costs by thousands of dollars, reducing new car sales and leading to job losses due to the U.S. auto sector’s reliance on imported parts.

In 2024, the U.S. imported $474 billion worth of automotive products, including $220 billion in passenger cars. The top suppliers—Mexico, Japan, South Korea, Canada, and Germany—are (were) all close U.S. allies. While Trump initially suggested a 25% tariff, he later granted a temporary 30-day exemption for Canada and Mexico under pressure from major U.S. automakers. However, U.S. Commerce Secretary Howard Lutnick recently stated there would be no exemptions, potentially escalating trade tensions with nations like Japan and South Korea, both of which have existing trade agreements with the U.S. that eliminate tariffs on American cars.

Justifying Tariffs with National Security Grounds

Trump has long criticized foreign auto tariffs, particularly the European Union’s 10% duty on vehicle imports, which is four times higher than the 2.5% rate imposed by the U.S. on passenger cars. However, the U.S. maintains a 25% tariff on imported pickup trucks, a policy that benefits Detroit automakers.

A key element supporting the administration’s tariff push is a 2019 Commerce Department investigation conducted under Section 232 of the Trade Expansion Act of 1962. The report concluded that excessive foreign auto imports weakened the U.S. industrial base and posed a potential national security threat by reducing investments in advanced technologies essential to military vehicle development. The report outlined three potential responses: negotiations with trading partners, tariffs of up to 25% on automobiles and certain components, and tariffs of up to 35% on light utility vehicles.

Although Trump previously threatened auto tariffs based on this investigation, he ultimately did not act, allowing the authority derived from the probe to expire. However, trade lawyers argue that the administration could revive its findings to justify immediate action. Ryan Majerus, a former Commerce Department official now with King & Spalding, stated to Reuters that the administration could quickly implement the report’s recommendations, citing successful litigation under Section 232 from Trump’s first term. He added that the president could also initiate a new investigation and reaffirm the 2019 findings to reestablish tariff authority.

Broader Trade Implications

Another avenue Trump could explore is invoking a 1930 trade law that permits the president to impose duties of up to 50% on imports from nations that discriminate against U.S. commerce. Beth Baltzan, a former senior adviser to U.S. Trade Representative Katherine Tai, noted that a higher tariff rate would likely incentivize North American manufacturers to increase their use of U.S.-made parts to qualify for tariff-free status under the U.S.-Mexico-Canada trade agreement. She explained that the current 2.5% tariff on passenger vehicles is so low that many producers simply pay it, whereas the 25% tariff on trucks has successfully encouraged North American sourcing.

Baltzan also questioned whether Trump’s strategy would achieve its intended goal of increasing U.S. auto exports, given the structure of global trade flows and the profitability of the North American market. If tariffs are imposed, they could provoke retaliation from key trade partners, further complicating international economic relations.

With Trump’s announcement expected soon, the global automotive industry and U.S. consumers alike await the potential economic fallout of a major shift in trade policy.