Donald Trump is once again blowing the world economy. Now the president says he is considering a 100 percent tariff on cars from Canada.
Donald Trump is now threatening to impose a 100 percent tariff on even more cars. The announcement comes in connection with his latest statements about the US economic situation and trade agreements.
In an interview with Bret Baier of Fox News, Trump stated that Canada could be hit with a significant increase in tariffs on cars.
According to Trump, Canada has a large auto industry, which the president says was built at the expense of the U.S. He believes that U.S. authorities have not previously given the problem enough attention.
– If you look at Canada, they have a very large auto industry. They took it from us. They took it because our people were sleeping in class.
"If we don't make a deal with Canada, we're going to put a big tariff on cars. It could be 50 percent or 100 percent because we don't want their cars. We're going to make the cars in Detroit," Trump said in the interview.
Trump's stated goal is to improve the terms of trade for the United States and secure more American jobs. But several industry experts are already skeptical about the way he intends to do so.
Flavio Volpe, president of the Automotive Parts Manufacturers Association, believes that such a tariff could have serious consequences for the industry.
– Last week, when we thought we would get a 25 percent tariff on everything, including cars and spare parts.
"I've already said that as soon as those tariffs are implemented, the industry will grind to a halt within a week," the Canadian lobby group's president told Global News .
He warns that the economic consequences could hit both American and Canadian automakers hard.
Many American cars are now built in Canada, including models such as the Chevrolet Silverado, Dodge Charger Daytona, and Chrysler Pacifica.
Previously, the Chrysler 300 and Dodge Challenger rolled off the assembly line in Canada. An increase in tariffs could affect these models and the auto industry in general.
Some critics have noted that Trump raised the threat of tariffs in a context where the issue was really about making groceries cheaper for Americans. Trump failed to answer the question directly.
There has been criticism of Trump's tariff policy from auto industry leaders in the past. Ford's CEO has previously criticized the administration's approach to tariffs, which he believes is hitting the auto industry unnecessarily hard.
The new announcements about a possible tariff increase come shortly after Trump signed two decrees imposing 25 percent tariffs on steel and aluminum from, among others, South Korea.
The president himself says the tariffs are intended to strengthen the American economy. And the country's steel industry. But several economists have warned that tougher tariffs could lead to higher prices and potentially hurt American companies that rely on foreign suppliers, but the tariffs benefit more than they benefit.
At the same time, Canada's response to such a policy could lead to trade conflicts affecting both countries.
It is still unknown how the Canadian authorities will react if the US implements the announced tariff increase.
Trade relations between the US and Canada have been marked by stalemates and disagreements in the past. Trump's tariff threat could make the situation worse.
It remains uncertain whether the announced measures will be implemented or whether another solution will be found through negotiations between the two countries.
The question now is how the automotive industry and consumers will be affected if such a tariff increase becomes a reality.
