President Donald Trump has announced a 25% tariff on imports of cars and light trucks, effective April 2. According to Trump, the move is aimed at supporting domestic automakers and could generate between $600 billion and $1 trillion for the U.S. over two years. However, his economic advisor Will Scharf offered a more modest estimate, projecting potential revenues of around $100 billion.

In addition, Trump proposed making interest on auto loans tax-deductible—but only for vehicles manufactured in the United States. This benefit would likely favor higher-income earners, as most Americans take the standard tax deduction and wouldn’t be able to claim the new break.

Experts warn the new tariffs could drive up car prices and reduce consumer spending, potentially slowing economic growth. Earlier in March, the Trump administration temporarily exempted American automakers from the import duties.