According to Refinitiv, US President Trump launched a new round of trade war on Wednesday, announcing a 25% tariff on "all non US assembled cars" starting from April 3, completely disrupting the global automotive trade pattern. This decision will deal a heavy blow to major automobile exporting countries, including allies, while the US government is still finalizing the implementation details. The following is an analysis of the three core contents:

Full coverage of vehicle tariffs

The new regulations will come into effect in the early morning of April 3rd, adding a 25% punitive tariff on top of the original 2.5% tariff. Of particular note is that even Canada, Mexico, and South Korea, which have signed free trade agreements with the United States, are not immune, and traditional automotive powerhouses such as Japan and Germany will be directly impacted.

Suspension period of tariffs on components

Although core components such as engines and transmissions also face a 25% tariff, the implementation time will be postponed until May 3rd. This' step-by-step 'strategy exposes the Trump administration's intention to reserve a buffer period for supply chain adjustments.

USMCA exemption trap

On the surface, vehicles that comply with the rules of origin of the US Mexico Canada Agreement (USMCA) may be exempt, but in reality, it is only limited to the "US component value" portion. For example, if a truck assembled in Mexico contains 45% American components, the remaining 55% of its value still needs to pay full tariffs - this "semi exempt" design is actually a disguised pressure for car companies to transfer production capacity.

Summary: Legal Logic and Strategic Intent

Trump cited Section 232 of the 1962 Trade Expansion Act to justify his actions on the grounds of "worsening national security threats". Although tariffs were temporarily suspended through negotiations in 2019, this direct display of the sword is not only a denial of the effectiveness of USMCA, but also exposes its extreme tendency towards "America First" policy. The global automotive industry is about to usher in a new round of supply chain earthquakes, and the shock wave of this trade nuclear explosion has just begun to spread.

Analysts point out that Trump's imposition of a 25% car tariff could escalate global trade tensions and rapidly raise market risk aversion. If countries such as the European Union and Japan take retaliatory measures, investors may flock to safe haven assets such as gold, driving up the short-term rise in gold prices.

Barclays economists stated in a report that South Korea is a prominent emerging economy in Asia in terms of its economic exposure to car tariffs. They pointed out that the White House's fact sheet states that American ingredients in products covered by the USMCA will be exempted, and the 25% import tariff will only be levied on the value of non American ingredients. They said, "The impact of car tariffs on the South Korean economy may be much more significant than the steel and aluminum tariffs imposed starting from March 12th." They said that although the US imports of steel and aluminum are indeed more significant in terms of their economic importance to Taiwan and Vietnam, this impact may at best be mild.

Philip Wee, Senior Foreign Exchange Strategist at DBS Research, stated in a commentary that Japan may restrain itself from retaliating against the US plan to impose tariffs on Japanese car exports. The senior foreign exchange strategist said, "The Japanese government should continue to resolve trade tensions with the United States through diplomatic efforts." Wee also said that at the same time, if the Japanese government starts to closely coordinate with the Bank of Japan to jointly address the economic risks brought by car tariffs, the market may reassess its expectations for Japan to raise interest rates in June or July, especially after the national CPI inflation rate in Japan cooled down in February compared to January.