On April 3rd, the day when U.S. President Donald Trump signed an executive order at the White House imposing so-called "reciprocal tariffs" on all trading partners, the "auto tariffs" previously announced by Trump also officially took effect.

According to reports from Reuters, Japan Broadcasting Corporation (NHK), and other media on the same day, this tariff targeting automobiles and automotive parts will significantly impact approximately $460 billion worth of related imports annually for the United States. As a representative of countries highly reliant on the American auto market, this auto tariff may cause Japan's GDP to shrink by 0.3%.

On April 2nd, the Trump administration informed the media that the 25% tariff on all imported vehicles and key automotive components announced by Trump on March 26th would take effect as scheduled. The tariff on vehicle imports will come into effect on April 3rd, while the tariff on automotive parts imports will be implemented on May 3rd.

It was reported that the White House has instructed the Department of Commerce to establish relevant procedures within 90 days in order to add more types of automotive parts to the list of goods subject to tariffs in the future. Other measures include allowing American automobile manufacturers to apply for tariffs on specific types of parts. Trump stated that imposing these tariffs is intended to help domestic automobile producers "resist overseas competitive pressures" and "facilitate the return of manufacturing to the U.S."

Trains loaded with cars planned for export to the U.S. and the U.K. by Volkswagen Group Reuters

However, given the highly globalized supply chain of modern automobile production, the vast majority of media outlets doubt that this tariff will actually increase the production costs for American automakers and fail to achieve the claimed "revitalization of manufacturing." In a report, CNN calculated that due to the tariff covering automotive parts, the production cost of each car made in U.S. factories could rise by $3,500 to $12,000.

The next day after Trump announced the imposition of auto tariffs (March 27th), most auto company stocks, including those of American automakers, experienced significant declines. These include Volkswagen Group, BMW Group, Daimler AG, Porsche AG under Volkswagen, Continental AG (automotive parts and tire manufacturer), General Motors Company, Ford Motor Company, and Stellantis Group. However, BYD, the world’s largest electric vehicle manufacturer, saw its stock price increase by about 3% that day.

Despite widespread skepticism among various parties regarding the actual effects of the auto tariffs, Trump continued to push the policy forward. This has had a noticeable impact on certain countries heavily dependent on automobile exports and the American auto market, with Japan being the first to feel the brunt.

According to NHK reports, in 2024, Japan exported over 1.33 million passenger vehicles to the U.S., accounting for nearly 30% of its total exports to the U.S. Previously, Japanese cars faced only a 2.5% import tariff in the U.S. However, under the pressure of the auto tariffs and America's so-called "reciprocal tariffs," not only might major Japanese auto companies suffer severe damage, but the extensive network of small and medium-sized suppliers domestically could also be affected. The Japan External Trade Organization (JETRO) stated that the new U.S. auto import tariffs could lead to a 0.3% contraction in Japan's GDP.

Regardless of whether it places cost pressures on domestic manufacturers or harms relations between the U.S. and traditional trading partners, it does not deter some Americans from strongly supporting Trump's auto tariff policies. Sean Feehan, president of the United Auto Workers Union, expressed his support for Trump's auto tariffs. In a statement released on Wednesday, he said: "We commend the Trump administration for stepping up to end decades of free trade disasters that have devastated workers' communities... Today's actions by the Trump administration are historic."

In response to Trump's auto tariffs, Chinese Foreign Ministry spokesperson Guo Jiakun stated: "We have noticed responses from America's main trading partners." He emphasized that trade wars and tariff wars have no winners, and no country's development and prosperity are achieved through the imposition of tariffs. The U.S. approach violates WTO rules, undermines the multilateral trading system based on rules and the common interests of all peoples, and is unhelpful in addressing its own issues.

This article is an exclusive contribution from Observer Network and cannot be reprinted without permission.

Original source: https://www.toutiao.com/article/7488980566512009762/

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