Trump ordered the investigation under Section 232 of the Trade Expansion Act of 1962, which allows the president to restrict imports that threaten US national security, including levying tariffs on foreign goods which excessively displace domestic goods or cause substantial unemployment.
"Core industries such as automobiles and automotive parts are critical to our strength as a Nation", the president said.
Late last week, Japan's automakers' association urged its export partners to keep tariffs on vehicles and components low and maintain free trade relationships.
Section 232 of the Trade Expansion Act of 1962 gives the executive branch the ability to conduct investigations to "determine the effects on the national security of imports".
German carmakers exported 494,000 vehicles to the U.S. previous year, the VDA said, while the Chambers of Commerce and Industry (DIHK) calculated autos and parts accounted for €28.6 billion ($33.6 billion) of Germany's €111.5 billion in exports to the US.
But even the powerful United Auto Workers doesn't sound convinced that hitting vehicle imports with tariffs is a good idea.
The Wall Street Journal reported earlier Wednesday that Trump was asking for vehicle import tariffs as high as 25 percent.
Trump has suggested new tariffs of 20 to 25 per cent on auto imports, according to The Associated Press, which based its report on an anonymous source.
"That is a point that we are making very clearly to our USA partners and allies", she said.
Both the administration source and the industry sources said that the US Commerce Department could make a formal announcement later on Wednesday. "This path leads inevitably to fewer choices and higher prices for cars and trucks in America", he said in a statement.
‘Difficult to imagine’ EU SURPRISED by Trump’s vehicle import threat
Despite his criticism of the United States for arguing that auto imports might be a national security issue, Trudeau defended Canada's decision to block a proposed C$1.51 billion ($1.18 billion) takeover of construction company Aecon by a Chinese state builder, also on national security grounds.
Almost half of the vehicles sold in the USA are imported, with many coming from assembly plants in Mexico and Canada. The biggest exporters of auto parts were Canada, Mexico, China, Germany and Brazil.
After many decades of losing your jobs to other countries, you have waited long enough", Trump tweeted in the hours before the announcement, which came amid reports that North American Free Trade Agreement talks between Mexico, Canada, and the USA have stalled over auto manufacturing rules. But she said it hasn't changed since the outset of negotiations last summer, which is to be "absolutely resolute in our defence of the Canadian national interest" while "looking creatively for compromises, for win-win-win solutions".
BMW's 10,000-employee plant in Spartanburg, South Carolina, is its biggest worldwide.
Although a large portion of the US's most popular vehicle models, including those from foreign brands (such as the upcoming BMW X7), are already manufactured within its borders, many are imported from other countries.
Foreign trade in an increasingly globalized economy involves a complicated array of rules and regulations that should be subject to frequent review and adjustment.
Trump had earlier blamed the United States neighbors to the north and south for being "difficult" in talks to renegotiate the pact.
Trump said on Tuesday that he has not reached a deal with Beijing to help save ZTE, but added that he may ask for a fine of roughly $1.3 billion, new management for the telecom giant and for China to buy more American products.
"They make it impossible for our cars (and more) to sell there".
Not a one-way road: The US auto industry exported almost 2 million vehicles worldwide worth $US57 billion.
'America is back,' President Trump tells Naval Academy grads
The president said he would stay to shake the hands of all roughly 1,100 graduates Friday. America is back", he said, as the audience applauded. "Victory.