Trump's 25% car tariff ignites international criticism

(Reuters) -U.S. President Donald Trump on Wednesday unveiled a 25% tariff on imported cars and light trucks starting next week, widening the global trade war he kicked off upon regaining the White House this year in a move auto industry experts expect will drive up prices and stymie production.

Here is some global reaction.

ELON MUSK, TESLA CEO

"Important to note that Tesla is not unscathed here. The tariff impact on Tesla is still significant.

"This will affect the price of parts in Tesla cars that come from other countries. The cost impact is not trivial."

SHIGERU ISHIBA, JAPAN'S PRIME MINISTER

"Japan is a country that is making the largest amount of investment to the United States, so we wonder if it makes sense for (Washington) to apply uniform tariffs to all countries. That is a point we've been making and will continue to do so.

"We need to consider what's best for Japan's national interest. We're putting all options on the table in considering the most effective response."

EU COMMISSION PRESIDENT URSULA VON DER LEYEN

"Bad for businesses, worse for consumers."

CANADIAN PRIME MINISTER MARK CARNEY

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

CHINESE FOREIGN MINISTRY SPOKESPERSON GUO JIAKUN

"No country's development and prosperity are achieved by imposing tariffs."

GERMAN ECONOMY MINISTER ROBERT HABECK

"What counts now is to have a firm response to these tariffs from the EU. It needs to be clear that we will not take this lying down."

"The EU must now give a firm response to the tariffs - it must be clear that we will not back down in the face of the USA."

U.K. FINANCE MINISTER RACHEL REEVES

"Trade wars are no good for anyone."

"We are working intensely these next few days to try and secure a good deal for Britain. I recognise how important this is."

NATIONAL FOREIGN TRADE COUNCIL, WHICH REPRESENTS MANY U.S. COMPANIES, VP TIFFANY SMITH

“Placing tariffs on imports of autos risks damaging the competitiveness and export readiness of an industry that relies on integrated international supply chains and markets for its success.

“We urge the administration to focus on the competitiveness of the U.S. auto industry and prioritize market opening opportunities for auto companies who manufacture vehicles for export in the United States.”

UNITED AUTO WORKERS UNION PRESIDENT SHAWN FAIN

“We applaud the Trump administration for stepping up to end the free trade disaster that has devastated working class communities for decades ... These tariffs are a major step in the right direction for autoworkers and blue-collar communities across the country, and it is now on the automakers, from the Big Three to Volkswagen and beyond, to bring back good union jobs to the U.S.”

UBS

"The tariffs could also disrupt supply chains, deter investments, and significantly raise consumer prices, while potentially igniting trade disputes with Europe, Japan, and South Korea"

"We still expect a significant expansion of tariffs, potentially leading to a cycle of tit-for-tat escalation and increased market volatility in the weeks ahead."

JP MORGAN

"The steep and broad-based tariffs are likely to cause supply chain disruptions globally, with an immediate hit to OEM production, likely greater than the demand hit near-term, driving inventory and days supply lower."

WEDBUSH

"In our view these initial tariffs (if they hold in their current form) would be a hurricane-like headwind to foreign (and many U.S.) automakers and ultimately push the average price of cars up $5,000 to $10,000."

CAPITAL.COM MARKET ANALYST KYLE RODDA

"I think the big concern is that not only will these tariffs be disruptive and economically harmful, but they indicate that the Trump administration's shake-up of global trade won't necessarily end with next week's announcement."

"This potentially drags out trade uncertainty even longer and raises the question of how radical a change to the global trade order is Trump trying to bring about."

BMW  

"A trade conflict between these economic regions [European Union and United States] would not have any benefits."

"Both sides should therefore promptly find a transatlantic deal that creates growth and prevents a spiral of isolation and trade barriers."

FRENCH CAR PARTS SUPPLIER VALEO 

"We will have to raise prices as a result."

AUTOFORECAST SOLUTIONS ANALYST SAM FIORANI 

"Clearly there are going to be winners and losers... Companies that have invested hundreds of millions and billions of dollars on plants in Canada and Mexico will likely see their profits cut dramatically over the next few quarters, if not into a couple years. We're going to look at adjusting our sales and production forecasts because this will throw everything into chaos."

EDMUNDS ANALYST JESSICA CALDWELL

"Many vehicle parts are sourced globally, which would increase repair costs for car owners, and reconditioning costs for dealers. Insurance premiums will also likely increase as any accidents involving new parts will see increased costs as well."

ONTARIO PREMIER DOUG FORD

"President Trump is at it again. His 25 per cent tariffs on cars and light trucks will do nothing more than increase costs for hard-working American families. U.S. markets are already on the decline as the president causes more chaos and uncertainty. He’s putting American jobs at risk. I’ve spoken with Prime Minister Carney. We agree Canada needs to stand firm, strong and united. I fully support the federal government preparing retaliatory tariffs to show that we’ll never back down."

GERMAN CAR INDUSTRY ASSOCIATION VDA PRESIDENT HILDEGARD MUELLER

"The announced additional US tariffs of 25% on all passenger cars and light commercial vehicles that are not manufactured in the U.S. are a fatal signal for free and rules-based trade... The German automotive industry is calling for immediate negotiations between the U.S. and the EU on a bilateral agreement."

UK'S SOCIETY OF MOTOR MANUFACTURERS AND TRADERS CEO MIKE HAWES

“Today's announcement by President Trump is not surprising but, nevertheless, disappointing if, as seems likely, additional tariffs are to apply to UK-made cars ... Rather than imposing additional tariffs, we should explore ways in which opportunities for both British and American manufacturers can be created as part of a mutually beneficial relationship."

CHUCK CARLSON, CHIEF EXECUTIVE OFFICER, HORIZON INVESTMENT SERVICES, HAMMOND, INDIANA

"I've been kind of suspect on all the tariff talks in terms of what is going to last, what is a negotiation, what is going to be pulled at the last minute. My initial reaction was this tariff might have some legs."

"There's probably going to be some exemptions or modifications for some of the U.S. automakers ... I could see the U.S. automakers getting some exemptions based on their supply chains. But I think he may want to see how this works out as opposed to stopping it in two or three days."

(Reporting by Andrea Shalal and Nandita Bose in Washington, Kalea Hall in Detroit, David Ljunggren in Ottawa, Christoph Steitz in Frankfurt and Unnamalai L in Bengaluru, Timothy Kelly and Leika Kihara in Tokyo, Amir Orusov in GdanskAdditional reporting by Global Finance & Markets Breaking News Team; Editing by Peter Henderson, Matthew Lewis and Janane Venkatraman)