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Trump's 25% auto tariff sparks international criticism

Donald Trump, the U.S. president, announced on Wednesday a 25% tariff for imported cars and light vehicles starting next week. This move will likely increase prices and slow production. Here are some reactions from around the world.

ELON MUSK is the CEO of TESLA

It is important to note that Tesla has not been left untouched in this situation. Tesla's tariff impact is still substantial.

The price of Tesla parts that are imported from other countries will be affected. "The cost impact is not insignificant."

SHIGERU ISHIBA IS JAPAN'S PRIME MINISTER

"Japan makes the most investment in the United States. We wonder, therefore, if (Washington's) application of uniform tariffs across all countries is justified. We have been arguing this point for a long time and will continue doing so.

We need to think about what is best for Japan's interests. "We're considering all the options to determine the best response."

PRESIDENTE DE LA COMMISSION EUROPÉENNE URSULA VON DER LEE

"Bad news for business, bad news for consumers."

CANADIAN PREMIER MINISTER MARK CAARNEY

"We will defend workers, companies, our country and together we will defend them."

CHINESE FOREIGN MINISTRY SPOKESPERSON GUO JIAKUN

Tariffs are not the way to achieve a country's prosperity and development.

GERMAN ECONOMY MINISTER ROBERT HABECK

What is important now is that the EU responds to these tariffs with a strong response. We must be very clear about our stance.

"The EU has to now respond firmly to the tariffs. It must be clear that the EU will not give in when faced with the USA."

U.K. Finance Minister RACHEL Reeves

Trade wars are bad for everyone.

"We will be working hard in the next few days to secure a fair deal for Britain." "I understand how important this issue is."

TIFFANY SMITE, VP, of the NATIONAL FOREIGN TRADE COUNCIL (which represents many U.S. companies)

"Tariffs on auto imports could harm the competitiveness of an industry that depends on international markets and supply chains for its success.

We urge the administration, to prioritize the market opening opportunities of auto companies that manufacture vehicles for export from the United States.

SHAWN FAITH, PRESIDENT OF THE UNITED AUTO WORKERS UNION

We applaud the Trump Administration for taking action to stop the free-trade disaster that has devastated communities of working class for decades. The tariffs are a big step forward for blue-collar workers and autoworkers across the nation. It is now up to automakers to bring good union jobs back to the U.S.

The tariffs may also cause supply chain disruption, discourage investments and raise consumer prices significantly, while provoking trade disputes with Europe and Japan.

"We expect significant tariff increases, which could lead to a cycle escalation of tit for tat and an increase in market volatility over the coming weeks."

JP MORGAN

The steep and broad-based tax increases are likely to disrupt supply chains globally. This will likely be more severe than the short-term impact on demand, and drive inventory and days' supply down.

WEDBUSH

The initial tariffs, if they remain in their current form, would create a "hurricane-like" headwind for foreign automakers (and many U.S. automakers) and eventually push up the average price of automobiles by $5,000 to $10,000.

CAPITAL.COM MARKET ANALYST KYLE RODDA

"I'm concerned that these tariffs will not only be disruptive, but also economically damaging. They show that the Trump administration isn't going to stop with the announcement next week."

This could prolong the trade uncertainty and raise the question as to how radical of a change Trump is trying to make to the global trading order.

A trade war between these two economic regions (the European Union and the United States) would be of no benefit.

Both sides must therefore quickly find a transatlantic agreement that promotes growth and avoids a spiraling of isolation and trade barriers.

FRENCH CAR PARTS SUPPLIER VALEO

We will need to increase our prices.

SAM FIORANI, ANALYST FOR AUTOFORECAST SOLUTIONS

"Clearly, there will be winners and losers... companies that have spent hundreds of millions or billions of dollars in plants in Canada and Mexico are likely to see their profits drop dramatically over the next couple of quarters, if they don't even into the next two years. We will adjust our production and sales forecasts, because it could cause chaos.

JESSICA CALLWELL, EDMUNDS Analyst

Many vehicle parts are imported from around the world, which will increase repair costs and reconditioning fees for car dealers. As accidents that involve new parts are more expensive, insurance premiums may also increase.

ONTARIO Premier DOUG FORD

"President Trump has done it again." The 25 percent tariffs on light trucks and cars will only increase the costs of hard-working American families. The U.S. market is already in decline, as the president creates more chaos and unrest. He puts American jobs in danger. I spoke with Prime Minister Carney. We both agree that Canada must be united, strong, and steadfast. "I fully support the federal Government preparing retaliatory Tariffs to demonstrate that we won't back down."

HILDEGARD MUELLER, PRESIDENT OF THE VDA GERMAN CAR INDUSTRY INDUSTRY ASSOCIATION

"The additional US tariffs announced of 25% on passenger cars and light trucks that are not made in the US are a death knell for free and rule-based trade. German automakers are calling for negotiations to begin immediately between the U.S.A. and EU on a bilateral deal."

UK'S SOCIETY of MOTOR MANUFACTURERS and TRADERS CEO MIKE HAWEES: "Today's President Trump announcement is not surprising, but it's disappointing if additional tariffs will be applied to UK-made vehicles, which seems to be the case.... Rather, than imposing more tariffs, we need to explore ways to create opportunities for both British manufacturers and American ones as part a mutually advantageous relationship."

CHUCK CARLSON CHIEF EXECUTIVE OFFICER HORIZON INVESTMENT SERVICE, HAMMOND (INDIANA)

"I have been a little suspicious about all the tariff discussions in terms of how long they will last, whether it is a real negotiation or if something is being pulled at the very last minute. "My initial reaction was that this tariff could have legs."

There will probably be exemptions or modifications made for some U.S. automobile manufacturers... I can see that the U.S. automobile manufacturers could get some exemptions because of their supply chains. "I think he would rather see how it goes than stop in two or three weeks."

(source: Reuters)