EUROPEAN COMMISSION PRESIDENT Ursula von der Leyen has pledged to “protect our workers” after Donald Trump announced that he will impose 25% tariffs on all cars and light trucks that are not built on US soil. 

The US President said the tariffs will take effect on 2 April, the same date that he is set to impose on EU goods and a date he has described as “liberation day”. 

The tariffs could be complicated as even US car makers source their components from around the world, meaning that they could face higher costs and lower sales.

Ford’s stock was up slightly today, but shares in Stellantis, the owner of Jeep and Chrysler, dropped nearly 4%, while shares in General Motors fell by about 3%. 

Speaking from the White House this evening, Trump said: “What we’re going to be doing is a 25% tariff on all cars that are not made in the United States. If they’re made in the United States, it is absolutely no tariff.”

Describing the tariff as “very modest”, Trump said the measure could lead to “tremendous growth” for the US car industry.

He said his administration would “charge countries for doing business in our country and taking our jobs, taking our wealth”. 

I deeply regret the U.S. decision to impose tariffs on EU automotive exports.

Tariffs are taxes – bad for businesses, worse for consumers, in the US and the EU.

The EU will continue to seek negotiated solutions, while safeguarding its economic interests ↓

— Ursula von der Leyen (@vonderleyen) March 26, 2025

In a statement, European Commission President Ursula von der Leyen said: “I deeply regret the US decision to impose tariffs on EU automotive exports.

“The automotive industry is a driver of innovation, competitiveness, and high quality jobs, through deeply integrated supply chains on both sides of the Atlantic,” she said.

As I have said before, tariffs are taxes – bad for businesses, worse for consumers equally in the US and the European Union.

Von der Leyen said the EU will continue to seek negotiated solutions, while safeguarding its economic interests.

“As a major trading power and a strong community of 27 Member States, we will jointly protect our workers, businesses and consumers across our European Union.”

Olof Gill, the EU Commission spokesperson for economic security and trade, said the bloc will now assess the tariff announcement, “together with other measures the US is envisaging in the next days.”

Trump has long said that tariffs against car imports would be a defining policy of his presidency, betting that the costs created by the taxes would cause more production to relocate to the US.

But American and foreign firms with domestic plants still depend on Canada, Mexico and other nations for parts and finished vehicles, meaning prices could increase and sales could decline as new factories take time to build.

Around half of all vehicles sold in the United States are imported, with the country’s current tariff on foreign cars standing at 2.5%. 

Trump has already placed a 20% tax on all imports from China and 25% tariffs on Mexico and Canada, with a lower 10% tax on Canadian energy products.

Parts of the Mexico and Canada tariffs have been suspended, including taxes on cars, after firms objected and Trump responded by giving them a 30-day reprieve which is set to expire in April.

He has also imposed 25% tariffs on all steel and aluminium imports, removing the exemptions from his earlier 2018 taxes on the metals. He also plans tariffs on computer chips, pharmaceutical drugs, lumber and copper.

Trump is expected to unveil a wide range of reciprocal tariffs – levies on imported goods that his administration claims are unfairly taxed by the US’s trading partners – on 2 April. 

He said today that the reciprocal tariffs will be “very lenient” and impact “all countries”, adding: “I think people are going to be very surprised.”

The EU has vowed to respond with retaliatory tariffs on €18 billion worth of US goods, which will come into effect in mid-April.

Finance Minister Paschal Donohoe has warned that the US tariffs could result in the loss of up to 80,000 Irish jobs in the medium term.

With reporting from Press Association