President Trump's plan to impose a 25% tariff on imported cars and parts is creating turmoil in the global auto industry, leading to declines in automakers' stock prices worldwide. The tariffs, effective next Thursday, target major vehicle exporters like Mexico, Japan, South Korea, and Canada. While Trump believes tariffs will encourage domestic manufacturing and job creation, economists warn of complex repercussions, including potential job losses and economic damage. In response, international leaders are preparing retaliatory actions, indicating a brewing trade conflict with significant global implications.
The tariffs put Trump's unorthodox trade theory to the test. To the president, tariffs encourage companies to move factories to the U.S., creating more American jobs.
Economists say their effects are more complicated and that they could cause significant collateral damage.
Mark Carney, Canada's leader, said the U.S. was no longer a reliable partner and that his country would announce retaliatory tariffs next week.
The economy minister of Germany stated it was crucial that the E.U. delivers a decisive response to the tariffs, saying, 'It must be clear that we will not back down.'
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