Trump imposes 25 percent tariff on cars, will it deepen threat of trade war, what experts are saying?

US President Donald Trump has announced a new tariff policy, imposing a 25 percent tariff on cars and car parts imported into the United States. 

This decision, effective April 2 for vehicles and potentially starting in May for car parts, raises the likelihood of a global trade war.

Trump asserts that these tariffs will lead to "tremendous growth" in the American automotive industry, promising increased employment and investment.

Speaking at the White House on Wednesday, Trump said the tariffs would bring back money from foreign countries that have been “taking our jobs” and “taking our wealth”.

Calling the move “exciting”, Trump, who has pledged to revive manufacturing in the US, said the tariffs would “spur growth like you haven’t seen before”.

Could disrupt critical car production in the US

However, expert opinions diverge significantly from the President's optimism. Analysts warn that this move could disrupt critical car production in the U.S., raise consumer prices, and strain relationships with allied nations.

In the previous year, the U.S. imported approximately 8 million cars, amounting to around $240 billion in trade. Mexico stands as the largest exporter of cars to the U.S., followed by South Korea, Japan, Canada, and Germany. Experts caution that Trump's new tariffs could jeopardize the global car trade and its intricate supply chains.