President Donald Trump is considering exempting automakers from specific tariffs. The White House confirmed the information with CNBC on Wednesday following a report from the Financial Times. This consideration comes amid growing pressure from the auto industry over new levies set to take effect.
The potential modification would exempt auto parts imported from China from the upcoming tariffs. However, this exemption would be separate from the existing and scheduled 25% tariffs on imported autos and auto parts, set to take effect on May 3.
After the White House confirmed the information, shares of major automakers and suppliers rose modestly in after-hours trading.
However, in a separate event on Wednesday, President Trump also floated the idea of increasing the 25% tariffs on imported vehicles from Canada. “When I put tariffs on Canada–they’re paying 25%–but that could go up, in terms of cars,” he stated to reporters 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 auto policy groups have been lobbying the Trump administration in an effort to claim some form of relief. Earlier this week, six of the top auto policy groups united to urge the administration to reconsider the upcoming tariff on auto parts. Their joint letter emphasized that many suppliers are already financially strained and unable to absorb further cost increases.
Automotive executives warn that stacking multiple tariffs will significantly increase production costs. Automakers and manufacturers are facing a 25% tariff on steel and aluminum imports, 25% duties on imported vehicles, and an additional 25% on auto parts starting May 3. While any potential exemption would offer some form of relief, the industry remains cautious as it waits for additional clarity before making any major shifts.
