The White House has confirmed that tariff exemptions for automakers are being considered amid concerns over economic impacts.
President Donald Trump is considering potential tariff exemptions for automakers. White House officials were confirmed by the Epoch Times on April 23rd.
Officials have not provided details, but similar 25% tariffs on auto parts that will take effect by May 3 are concerned as car manufacturers and suppliers are raising concerns about the Trump administration’s 25% tariffs on imported passenger cars and mild trucks.
Representative of almost every major automaker, Alliance for Automotive Innovation has become the leading voice of pushback. In a previous official statement, John Bozzella, the alliance’s president and CEO, warned that the new tariffs would spread across the US economy.
“Motorcycles are America’s largest manufacturing sector,” Bozzela said. “Automobile manufacturers, battery manufacturers and parts suppliers invest billions in American manufacturing, including Michigan, Tennessee, South Carolina, Alabama, Mississippi, Kentucky, Ohio, West Virginia, Texas, Michigan, Tennessee, Indiana, Illinois, Missouri, Georgia and New York, to directly support the community and American workers.
He said higher tariffs would increase consumer costs, reduce U.S. car exports and reduce vehicle sales. “Before new manufacturing or jobs are created in this country.”
In an April 21 letter to management officials, the Alliance and other industry groups warned that many automotive suppliers remain financially vulnerable. “Most car suppliers are not capitalized due to sudden tariff destruction,” the letter states. “Many are already struggling and face production halts, layoffs and bankruptcies.”
Trump says tariffs are a necessary tool to encourage domestic production and address what he said was decades of unfair foreign trade practices. The administration says the policy aims to reverse offshoring in car manufacturing and revive industrial capabilities at home.
For many years, US automakers have developed deep, integrated cross-border supply chains to reduce costs. According to the Canadian Vehicle Manufacturers’ Association, a single automotive part can cross as many as eight US borders in the final assembly.
A recent analysis by the Center for Automotive Research estimates that a 25% tariff will increase the overall costs of US automakers by 2025 by approximately $108 billion.
Despite widespread opposition from manufacturers, tariffs are gaining support from United Auto Workers (UAW) trade unions. In an interview with ABC News on March 9, UAW President Sean Fein said that disproportionate trade with countries such as Canada and Mexico has resulted in the loss of around 90,000 manufacturing facilities in the United States over the past 30 years.
Trump appears to acknowledge the challenge of reusing production during the April 14 briefing, saying that automakers may need additional time to adjust. “They’re switching to parts made in Canada, Mexico and elsewhere,” he said. “They’re going to make them here, so it’s going to take a little time.”
Meanwhile, the president said on April 23 that the 25% tariffs imposed on cars imported from Canada could increase dramatically.
“I’m going to put tariffs on Canada – they pay 25%, but that could rise on the car side,” Trump told reporters in the oval office. “What we’re doing is saying, ‘We don’t want your car, with all the respect. I really want you to build your own car.’ ”
