The Big Three automakers might be getting a break.
President Donald Trump said Monday he’s considering temporary exemptions from his 25% tariffs on the auto industry to provide additional time for them to shift more manufacturing to the U.S.
Speaking in the Oval Office on Monday, Trump said he’s “looking to help” automakers,
“I’m looking at something to help some of the car companies, where they’re switching to parts that were made in Canada, Mexico and other places,” Trump told reporters. “And they need a little bit of time, because they’re going to make them here.”
An exemption on some of the tariffs he placed on autos tariffs ‒ including 25% on all foreign cars and light trucks as well as some auto parts ‒ could provide some relief for automakers wrestling with tariffs that could force a hike in car prices for American consumers.
Stock shares of the three largest U.S. automakers — Ford, General Motors and Stellantis – rose sharply after shot up after Trump talked about the possible reprieve, according to a report from USA Today.
The tariffs on foreign vehicles began April 3. The levies on foreign auto parts, including transmission and engines, are set to begin by May 3.
Automobiles that fall under the umbrella of imports protected in the Canada-United States-Mexico Agreement ‒ a trade deal orchestrated by Trump in his first term ‒ are not subject to the full 25% tariff rate, USA Today reported. Instead, the Trump administration only placed tariffs on foreign parts that make up vehicles imported from Canada and Mexico.
It’s unclear whether Trump is exploring a short-term tariff exemption on auto parts, foreign cars or both. The move would continue what’s been a whiplash approach to imposing levies on imports, creating uncertainty that has rattled global markets.
Michigan Gov. Gretchen Whitmer said Monday the tariffs are hurting more than just the large automakers. Suppliers, she said, are also feeling the effects of what she called “the whiplash in the economy.” “Businesses, especially small businesses, need certainty more than ever,” Whitmer said during an appearance at the Detroit Economic Club. “It’s really hard to understate how much harm the current economic strategy will cost tier two and tier three businesses.”
