President Donald Trump said Monday that his administration is considering easing tariffs on imported auto parts, citing the need to give automakers time to transition supply chains and expand domestic production. The move comes as North American auto production faces mounting disruptions and industry leaders warn of rising costs and economic fallout.
“I’m looking at something to help some of the car companies,” Trump told reporters in the Oval Office. “They’re switching to parts made in Canada, Mexico, and other places, and they need a little bit of time because they’re going to make them here.”
Trump’s comments follow mounting pressure from automakers, suppliers, and political leaders to reconsider tariffs, including a 25% duty on imported vehicles that took effect earlier this month and another 25% tariff on parts scheduled to begin May 3. Analysts estimate these duties could cost the industry tens of billions of dollars, strain production, and drive up vehicle prices by as much as 10%.
However, stocks for major automakers surged on the news. General Motors and Ford shares rose more than 4% Monday afternoon, while Stellantis gained around 3% on the New York Stock Exchange.
The proposed policy shift marks a significant departure from Trump’s initial tariff stance, which he characterized as “permanent, 100%.” Trump invoked Section 232 of the Tariff Expansion Act to justify the levies, citing national security and the need to strengthen the domestic supply chain. However, growing economic strain and fears of prolonged industry instability have pushed the administration to reconsider.
Meanwhile, auto production has already been impacted. Stellantis temporarily idled its Windsor and Toluca assembly plants, affecting the output of Chrysler minivans and Jeep Compass vehicles and prompting layoffs at Michigan-based feeder plants. GM recently increased truck production in Indiana but cut jobs at electric vehicle facilities in Detroit and Ontario, citing market shifts.
S&P Global warned the tariffs could raise average vehicle prices to nearly $55,000 and reduce U.S. vehicle sales by as many as 1.2 million units over the next two years.
Analysts also estimate GM and Ford could lose $4 billion to $7 billion in annual operating profit if the tariffs remain in effect. Rivian Automotive, which has limited exposure to international supply chains, may fare better, but its scale is significantly smaller.
Trump’s tariff policy has shifted repeatedly since taking office. While he delayed tariffs on Canadian and Mexican goods earlier this year and granted USMCA-compliant exemptions, he has also introduced a 90-day pause on new tariffs for dozens of countries and carved out exceptions for Apple and other tech manufacturers.
Despite insisting that his approach is deliberate and strategic, critics say the uncertainty damages long-term investment and weakens U.S. competitiveness.
With auto industry leaders, lawmakers, and even labor unions calling for greater clarity and stability, many are advocating for renewed USMCA negotiations.
