The White House has confirmed that tariff exemptions for automakers are being considered, amid concerns over their economic impact.
President Donald Trump is considering potential tariff exemptions for automakers, a White House official confirmed to The Epoch Times on April 23, following weeks of intense lobbying by industry leaders warning of disruptions to supply chains and rising consumer costs.
Although the official did not provide specifics, the confirmation comes as automakers and suppliers voice growing concerns over the Trump administration’s 25 percent tariff on imported passenger vehicles and light trucks—effective April 3—and a similar 25 percent tariff on auto parts set to take effect by May 3.
The Alliance for Automotive Innovation, which represents nearly all major automakers, has been a leading voice in the pushback. In an earlier public
statement, Alliance President and CEO John Bozzella warned that the new tariffs would ripple across the U.S. economy.
“Automaking is America’s largest manufacturing sector,” Bozzella said. “Automakers, battery makers, and parts suppliers have invested billions in American manufacturing and directly support communities and American workers in Michigan, Tennessee, South Carolina, Alabama, Mississippi, Kentucky, Ohio, West Virginia, Texas, Indiana, Illinois, Missouri, Georgia, New York, and more.”
He said that higher tariffs would raise costs for consumers, reduce U.S. auto exports, and lower vehicle sales—“all before any new manufacturing or jobs are created in this country.”
The Alliance and other industry groups also warned in an April 21 letter to administration officials that many auto suppliers remain financially vulnerable. “Most auto suppliers are not capitalized for an abrupt tariff-induced disruption,” the letter
stated. “Many are already in distress and will face production stoppages, layoffs, and bankruptcy.”
Trump
has said the tariffs are a necessary tool to incentivize domestic production and address what he said were decades of unfair foreign trade practices. The administration has said that the policy is aimed at reversing the offshoring of automotive manufacturing and reviving industrial capacity at home.
Over the years, U.S. automakers have developed deeply integrated cross-border supply chains to lower costs. According to the Canadian Vehicle Manufacturers’ Association, a single auto part
can cross the U.S.-Canada border as many as eight times before final assembly.
A recent
analysis by the Center for Automotive Research estimated that the 25 percent tariffs would increase overall costs for U.S. automakers by approximately $108 billion in 2025.
Despite broad opposition from manufacturers, the tariffs have
drawn support from the United Automobile Workers (UAW) labor union. UAW President Shawn Fain
said in a March 9 interview with ABC News that unbalanced trade with countries like Canada and Mexico has led to the loss of roughly 90,000 manufacturing facilities in the United States over the past three decades.
Trump, for his part, appeared to acknowledge the challenge of reshoring production during an April 14
briefing, saying automakers may need additional time to adjust. “They’re switching to parts that were made in Canada, Mexico, and other places,” he said. “They need a little bit of time because they’re going to make them here.”
Meanwhile, the president said on April 23 that the 25 percent tariff imposed on cars imported from Canada could well increase.
“I put tariffs on Canada—they’re paying 25 percent—but that could go up, in terms of cars,” Trump told 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.’”
