Mar 27, Kathmandu- US President Donald Trump has announced heavy tariffs on auto imports and auto parts.

America's trading partners have warned of retaliation against Trump's latest tax policy. Wall Street fell ahead of Trump's announcement on Wednesday afternoon, with shares of Toyota, the world's top-selling automaker, falling more than 3 percent.

Japanese Prime Minister Shigeru Ishiba said Tokyo was "considering all kinds of retaliatory measures", while Canadian Prime Minister Mark Carney called Trump's tax a "direct attack" on his country's workers.

Brazilian President Luiz Inacio Lula da Silva also said his country “cannot stand still.” “We have decided to impose a 25 percent tariff on all cars not made in the United States,” Trump said in the Oval Office, signing the order.

“The tariff will take effect at 12:01 p.m. U.S. time on April 3 and will affect cars and light trucks made abroad. Major automobile parts will also be affected within a month,” the announcement said.

Trump has threatened to impose “far greater tariffs than currently planned” if Canada and the European Union work together to “economically harm” the United States.

In an interview with reporters after Trump’s announcement, Peter Navarro, Trump’s senior adviser on trade and manufacturing, criticized “foreign trade manipulation,” saying it has “protected America’s manufacturing sector for low-wage foreign workers.”

He criticized Germany and Japan for concentrating production of high-value parts in their own countries and exporting cheaper equipment. Trump ally and Tesla owner Elon Musk said Washington’s tariffs had “no impact” on the cost of his firm’s cars.

Since taking office in January, Trump has imposed new tariffs on imports from major U.S. trading partners Canada, Mexico and China, as well as 25 percent tariffs on steel and aluminum.

The new taxes would be in addition to taxes already imposed on products, but the White House has said vehicles entering under the United States-Mexico-Canada Agreement (USMCA) could qualify for lower rates based on their American content.

Uncertainty over Trump's trade plan and concerns it could trigger a recession have rattled financial markets and consumer confidence has also eroded in recent months.