New Subaru vehicles in a storage lot at Auto Warehouse Co. in Richmond, California, on March 26, 2025. Credit: David Paul Morris/Bloomberg.

President Donald Trump signed a proclamation that adds a 25 percent tariff on auto imports and pledges harsher punishment on the European Union (EU) and Canada if they join forces against the United States, expanding a trade war and triggering threats of retaliation. “What we’re going to be doing is a 25 percent tariff on all cars that are not made in the United States,” Trump said at the White House on Wednesday as he pushed ahead with a program seeking to bring more manufacturing jobs to the U.S. Hours later, Trump suggested that further tariffs would be imposed on the EU and Canada if they work together “to do economic harm” to the U.S. The reaction in currency markets, including the euro and Canadian dollar, was muted.

Taken together, Trump’s escalating trade actions appear likely to deepen tensions with key trading partners even before his promised so-called “reciprocal tariffs” on April 2.

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