U.S. President Donald Trump has announced the imposition of a 25% tariff on all imported automobiles, reigniting trade tensions and prompting strong reactions from global markets and international leaders. Citing a 2019 national security investigation, Trump claimed the measure was necessary to protect the American auto industry and encourage domestic production.

The decision has already sent shockwaves through financial markets, with major U.S. automakers such as General Motors and Ford experiencing notable stock declines. Internationally, auto stocks in Japan and South Korea collectively lost an estimated $16.5 billion, while European markets braced for further downturns.

European Commission President Ursula von der Leyen expressed concern over the U.S. decision, stating that the European Union would assess the impact and respond accordingly. “Tariffs are detrimental to businesses and consumers on both sides,” she said, adding that the EU aims to negotiate a resolution while safeguarding its economic interests.

Mexico, a key player in the North American auto supply chain, has begun negotiations to seek preferential treatment for its automobile industry. Economy Minister Marcelo Ebrard is in Washington discussing potential exemptions, while President Claudia Sheinbaum is meeting with auto manufacturers to mitigate the impact and strengthen the internal market.

Brazil’s Secretary of Foreign Trade, Tatiana Prazeres, warned that escalating trade tensions could have widespread economic repercussions. She noted that the situation might worsen before stabilizing and emphasized the importance of strengthening global trade partnerships.

Economists predict that the tariffs could disrupt global supply chains and significantly impact car manufacturers’ profitability. While the measure is expected to generate revenue for the U.S. auto industry, it could also lead to higher vehicle prices for consumers. Industry experts caution that the rapid implementation of such tariffs could trigger economic instability, particularly for countries heavily reliant on auto exports.

As trade tensions mount, global leaders are preparing for diplomatic discussions in an attempt to mitigate the economic fallout. The coming weeks will determine whether negotiations can ease tensions or if the world is on the brink of a new phase in the ongoing trade war.