U.S. President Donald Trump is expected to grant tariff exemptions for car parts, offering partial relief to automakers amid intense industry lobbying. Trump’s tariff exemptions aim to ease the burden of trade policies disrupting the auto sector.
The expected tariff exemptions will spare car parts from duties targeting Chinese imports and those on steel and aluminum, per two sources familiar with the matter. Sources called the strategy a “destacking” of tariffs. The 25% tariff on foreign-made cars, already in effect, and a 25% duty on imported car parts, set for May 3, will remain.
The Center for Automotive Research estimated that Trump’s 25% tariffs on automotive imports will inflate automakers’ costs by $108 billion in 2025, threatening profitability and supply chains. Automakers are clambering to comply with Trump’s auto tariffs while maintaining car prices, or at least keeping prices reasonable. However, the tariffs threaten to unravel the auto industry, affecting automakers, parts suppliers, and long-established supply chains.
Tesla has quickly adjusted to Trump’s auto tariffs, suspending plans to ship components from China for its Cybercab and Semi electric trucks to the U.S. Similarly, Ford halted shipments of select vehicles to China, facing retaliatory tariffs as high as 150%, which have severely impacted its export strategy.
The partial exemptions offer a reprieve for automakers reliant on global supply chains, but the persistent 25% tariffs on cars and auto parts continue to challenge cost structures. As U.S. automakers navigate these trade hurdles, the exemptions could stabilize some operations, though rising car prices and supply chain disruptions remain significant concerns for the industry’s outlook in 2025.
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