The new levies, if kept for an extended period, could add thousands of dollars to the cost of an average U.S. vehicle purchase and impede car production across North America.
Nearly half of all cars sold in the U.S. last year were imported, research firm GlobalData says.
In Asia, shares in Toyota Motor, Honda Motor and Hyundai Motor all fell between 3% and 4%.
Trump said the duties announced on Wednesday could be a net neutral or even good for Tesla, adding that its CEO, and his close ally, Elon Musk, did not advise him regarding auto tariffs.
“This will affect the price of parts in Tesla cars that come from other countries,“ he wrote in another post on X. “The cost impact is not trivial.”
Trump’s tariffs and threats to impose them have sowed uncertainty in businesses and roiled global markets since he returned to the White House in January.
Autos Drive America, a group representing major foreign automakers such as Honda, Hyundai, Toyota and Volkswagen , said the “tariffs imposed today will make it more expensive to produce and sell cars in the United States, ultimately leading to higher prices, fewer options for consumers, and fewer manufacturing jobs in the U.S.”
After clamping tariffs of 25% on Mexico and Canada in early March, Trump allowed a one-month reprieve for vehicles produced in compliance with the terms of his USMCA, which benefited American companies.
“Companies that have invested hundreds of millions and billions of dollars on plants in Canada and Mexico will likely see their profits cut dramatically over the next few quarters, if not into a couple years,“ said Sam Fiorani, analyst at AutoForecast Solutions.
The White House said that 25% tariffs on automotive parts imported to the U.S. would take effect no later than May 3, taxing key items such as engines, transmissions, powertrain parts, and electrical components.
Before the unveiling of the new tariffs, Cox Automotive, an automotive services provider, predicted they would add $3,000 to the cost of a U.S.-made vehicle and $6,000 on vehicles made in Canada or Mexico, without exemptions.
The United Auto Workers union, which represents factory workers at Big Three Detroit automakers, praised Trump’s action.
“With these tariffs, thousands of good-paying blue collar auto jobs could be brought back to working-class communities across the United States within a matter of months, simply by adding additional shifts or lines in a number of underutilized auto plants,“ UAW President Shawn Fain said in a statement.
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