Trump plans 25% tariffs on car imports to protect US auto industry

Donald Trump plans to impose a 25% tariff on cars and parts from Mexico and Canada, starting on his first day in office. This move aims to protect American-made vehicles, but most cars contain parts from multiple countries, complicating the definition of "American-made." The North American auto industry relies on free trade, allowing parts to move easily across borders. Trump's tariffs could disrupt this system, leading to higher prices for consumers. Shares of major automakers fell following the announcement, reflecting concerns over potential cost increases. If implemented, these tariffs could raise the price of both imported and domestically assembled vehicles. The auto industry may struggle to replace imported parts with domestic alternatives, further driving up costs for consumers already facing high vehicle prices.