The White House confirmed Wednesday that President Donald Trump is contemplating an exemption for automakers from certain tariffs introduced by his administration. This revelation came from a statement provided to Finance Newso’s Eamon Javers.
This announcement follows a report by the Financial Times, which indicated that the President is considering excluding auto parts from tariffs on imports from China, a measure intended to address issues related to fentanyl production, along with existing tariffs on steel and aluminum.
The potential exemption would not apply to the 25% tariffs on imported vehicles and auto parts, which are set to be implemented by May 3, as reported by the Financial Times.
In after-hours trading on Wednesday, shares of various automakers and suppliers showed a modest increase.
Additionally, Trump mentioned on Wednesday that the 25% tariff on cars coming from Canada could increase. “When I put tariffs on Canada — they’re paying 25% — but that could go up, in terms of cars,” he stated during a briefing in the Oval Office. “All we’re doing is we’re saying, ‘We don’t want your cars, in all due respect. We want, really, to make our own cars.’”
Automakers and automotive policy organizations have been actively lobbying for relief from tariffs, which are accumulating pressure on the industry.
Trump has already exempted automobiles from his proposed “reciprocal” geographic tariffs, which would impose high duties on imports from numerous countries. However, the industry continues to grapple with 25% levies on steel and aluminum, as well as the 25% tariff on all imported vehicles entering the United States.
The auto parts tariff set to be imposed on May 3 would add to these existing duties.
Automotive executives would welcome any exemptions or adjustments to these tariffs, particularly as concerns grow regarding the upcoming auto parts tariffs escalating operational costs further. This week, six leading policy groups from the U.S. automotive sector formed an unprecedented coalition to advocate against the impending tariffs.
In a letter to the Trump administration, the groups stated, “President Trump has indicated an openness to reconsidering the administration’s 25 percent tariffs on imported automotive parts – similar to the tariff relief recently approved for consumer electronics and semiconductors. That would be a positive development and welcome relief.”
This coalition, which encompasses franchised dealers, suppliers, and nearly all major automakers, expressed that the looming tariffs could threaten U.S. automotive production. They noted that numerous auto suppliers are already facing financial difficulties and may not withstand further cost increases, potentially leading to broader issues in the industry.
General Motors CEO Mary Barra chimed in Wednesday, emphasizing the need for clear and consistent regulations for competitive advantage. “First of all, I need clarity, and then I need consistency,” Barra stated during Semafor’s World Economy Summit. “To make those investments and to be good stewards of our owner’s capital, I need to understand what the policy is.”
Barra acknowledged that while GM has adjusted to changing trade policies, the company will refrain from making any major changes until there is greater clarity on U.S. regulations.
