President Donald Trump’s move to pause the majority of what he calls retaliatory tariffs gives little relief to the auto industry. The pre-existing 25 percent duties on imported vehicles and parts remain in effect, leaving automakers and suppliers dealing with ongoing uncertainty while facing sharply increased prices on goods from China.
President Trump announced Wednesday a 90-day suspension and reduction for what he called “reciprocal” tariffs, imposed on approximately 75 nations. He also set a temporary floor for tariffs of 10 percent. This comes after escalations last week when the US imposed widespread duties, prompting retaliation from numerous trading partners. However, administration officials quickly clarified that this pause does not extend to specific “sectoral” tariffs.
Speaking outside the White House, Treasury Secretary Scott Bessent confirmed the previously imposed tariffs that targeted specific industries, including the 25 percent duties imposed on automobiles and auto parts on April 3, along with those on steel and aluminum, are not included in the 90-day pause. The White House later confirmed to the Detroit Free Press that these tariffs would continue.
American Automakers Face Continued Uncertainty
The development was met with disappointment by industry groups representing Michigan, a state heavily reliant on automotive manufacturing. Glenn Stevens, executive director of MichAuto, expressed concern over the exclusion. He said the state’s “signature industry and the supply chains and employees that sustain it will continue to endure the uncertainty and disruption of these fluctuating trade policies.”
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The automotive association advocates for stable trade policies, particularly stressing the importance of the US-Mexico-Canada Agreement (USMCA) negotiated and enacted under President Trump’s first term. Stevens argues maintaining “key trade partnerships” through trade deals like USMCA is a better strategy for strengthening North American manufacturing than tariffs.
The lack of details on how USMCA compliance impacts the auto tariffs adds to the confusion. The Trump administration has indicated that compliant vehicles and parts would be exempt but has not specified what imports meet that standard.
Analysts See ‘Gut Punch’ Amid Market Relief
While the US stock market reacted positively to the partial pause, analysts admit the auto sector faces unique pressure.
“Pausing tariffs is good news and could help consumer confidence despite the pause not including the 25% foreign auto tariff,” said Morningstar analyst David Whiston. He also acknowledged that significant “headwinds still out there,” including higher tariffs on Chinese goods, will hurt consumers.
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Wedbush Securities Managing Director Dan Ives characterized the exclusion as a “gut punch to the Detroit automakers.” He suggested that the market rally indicated investors’ hope for eventual negotiations, even on auto duties.
“I expect that auto tariffs are going to be front and center on the table over the coming weeks because Detroit would be decimated by these auto tariffs,” said Ives. He predicts the potential adverse developments, like layoffs, could force the administration’s hand in talks.
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The American Automotive Policy Council (AAPC), which represents Ford, General Motors, and Stellantis, referred back to its earlier statement, supporting increased US production while cautioning that tariffs must be implemented carefully in a way “that avoids raising prices for consumers and that preserves the competitiveness” of the North American auto market.
While most goods coming into the US will only see a 10 percent tariff over the next 90 days, the White House did not spare China. All imported goods from China are now subject to a 125 percent tariff following Beijing’s decision to impose retaliatory tariffs on American products. For automotive enthusiasts, this is expected to have a drastic impact on the price of tools and non-OEM parts.
Source: Detroit Free Press
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