US President Donald Trump might consider pausing the 25% tariffs he imposed in early April on vehicles produced outside the United States. He said this himself while speaking to journalists. The tariffs were meant to be permanent, but now there appears to be a possible slight reversal. The controversies and alarms raised by the industry, which had warned of severe impacts, may have convinced Trump to change course.
Is Trump ready to temporarily suspend tariffs for the auto sector?
After the announcement of tariffs on cars produced outside the United States, the impact on automakers has been devastating. Stellantis, for example, laid off 900 American workers and about 5,000 in Canada, temporarily closing the Windsor plant (which might now reopen for two weeks) and the Toluca plant in Mexico. Following the controversies, Trump suspended tariffs for 90 days, with the exception of China and the auto sector. Now, even the auto sector might see a pause to give car manufacturers time to adapt.
The US President told journalists that he might temporarily exempt the automotive industry from tariffs to give automakers time to revise their complex supply chains. “Automakers need some time to move production from Canada, Mexico, and other places to the United States.”
A pause on car tariffs is therefore being considered to give automakers time to reorganize and move production within the United States to avoid paying the new customs duties. This should also apply to component manufacturing companies, which will soon be hit by the 25% tariffs as well.
After all, American automakers’ supply chains are closely interconnected with those of other nations, making it almost impossible to produce vehicles entirely in the United States. According to analysts, there is no car made entirely in America, as US automakers source many of their components from trading partners with production in countries like Canada, Mexico, and China. This is precisely why time is needed to reorganize, if it’s truly possible to do so.
