Brazil's president criticises Trump's decision to impose car import tariffs

Brazil’s President Luiz Inácio Lula da Silva, currently on a  visit to Japan, has taking a swipe at US President Donald Trump’s decision to slap a 25% tariff on all imported vehicle.

The decision is a blow to Japan which together with Mexico, South Korea, Canada, and Germany, all close allies of Washington, are the biggest suppliers of car products to the United States.

"From what I know, the United States imports a lot of Japanese cars and also has a lot of Japanese companies' production sites. I honestly don't know what the benefit is of increasing tariffs on cars purchased from Japan by 25 per cent," said Lula.

Trump claims the new tariff will encourage more manufacturing in the United States, but as he expands the globe trade war, the announcement has already hammered stocks and further strained ties with allies.

Both local and foreign car manufacturers with factories in the US source many of their components from around the world.

Lula said the only thing he knows is that it will make it more expensive for Americans to buy cars.

"And this increase in price could result in higher inflation and this inflation target means an increase in interest rates. An increase in interest rates means a containment of the economy," he said.

Trump’s new levies on cars and light trucks will come into effect on 3 April.