A rise in existing tariffs on Chinese-made cars is also on the cards.
US president Donald Trump has threatened to raise tariffs on imported cars, in the wake of General Motors' announcement that it would close up to five manufacturing plants in the USA.
In a series of tweets, Trump said that plans to introduce car tariffs are currently being studied. Citing the existing 25 per cent tariff on imported small trucks, he claimed that if the same tariff applied to passenger cars, GM would not have closed its plants in Michigan, Ohio and Maryland.
General Motors' announcement that it would close the plants, as well as cut up to 14,000 jobs came as a blow to the Trump administration, which has made rebuilding American manufacturing a policy priority.
Commerce Department figures show that last year the United States imported 8.27 million vehicles worth US$192 billion. It goes without saying that a possible 25 per cent tariff would have an enormous impact on the US car industry.
The United States currently imposes a 2.5 per cent import tariff on all overseas manufactured cars. However, for Chinese manufactured cars this figure rises to 25 per cent. China, on the other hand imposes a 40 per cent tariff on all US manufactured cars.
US trade representative Robert Lighthizer has indicated that he was exploring the possibility of raising US tariffs to match those imposed by China.
"As the president has repeatedly noted, China's aggressive, state-directed industrial policies are causing severe harm to US workers and manufacturers," Mr Lighthizer said.
These comments from both Trump and Lighthizer come days before the G20 summit in Argentina, in which Chinese President Xi Jinping is expected to meet with Trump.
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