(NewsNation) — The White House is weighing exemptions that could spare automakers some of President Donald Trump’s tariffs, according to multiple reports.
The Financial Times reported Wednesday that Trump is planning to exempt auto parts from tariffs on imports from China that were applied to counter fentanyl production, as well as levies on steel and aluminum, citing two people familiar with the matter.
The move would effectively “de-stack” the duties when it comes to auto parts.
How does the automotive supply chain work?
However, the exemptions would leave in place a 25% tariff that Trump imposed on all foreign car imports, the FT reported. A separate 25% tariff on parts, which is set to take effect on May 3, would also remain.
Another option being studied would fully exempt auto parts that comply with the US-Mexico-Canada trade pact, known as the USMCA, according to Bloomberg. Those components don’t currently face tariffs, but the administration had planned to tax the non-US share of those parts from Canada and Mexico, Bloomberg said.
President Trump hasn’t signed off on any of the reported plans and said he was not considering any changes to auto tariffs during a presser in the Oval Office on Wednesday.
Truckers fear for job security amid tariff confusion
In fact, the president said auto tariffs on Canada could go up.
“We don’t really want Canada to make cars for us, to put it bluntly,” Trump told reporters. “We want to make our own cars and we’re now equipped to do that.”
Any carve-out for auto parts would come as welcome relief to carmakers who have warned that the tariffs will lead to higher prices for consumers, even for cars made in the U.S.
That’s because the auto supply chain is a complex, interconnected web of domestic and international suppliers — a network that makes tracking each part’s tariff impact a logistical nightmare. In some cases, a single car part can cross the border multiple times before it ends up in a finished vehicle.
An import tax on auto parts will also drive up repair and insurance bills, meaning everyone with a car, not just buyers, will notice.
Auto groups are lobbying the Trump administration to reverse course ahead of May 3, when tariffs on auto parts are set to take effect.
Trump claims his tariffs will revive U.S. manufacturing, but some automakers have cut jobs instead.
Last week, Volvo Group North America announced plans to lay off hundreds of workers across Mack Truck and Volvo plants in Pennsylvania, Virginia and Maryland.
“Heavy-duty truck orders continue to be negatively affected by market uncertainty about freight rates and demand, possible regulatory changes, and the impact of tariffs,” John Mies, a Volvo spokesperson, told NewsNation in an email.
Earlier this month, Stellantis — the automaker behind Chrysler, Dodge, Jeep and Ram Trucks — paused production at several North American plants, prompting temporary layoffs in Michigan and Indiana.
