Donald Trump is considering postponing the controversial auto tariffs to give automakers like General Motors, Ford and Stellantis time to move production back to the United States.
US President Donald Trump is now considering giving the country's automakers a break from the current car tariffs.
This is to give them more time. Manufacturers must adjust to making more parts in the United States, according to the White House.
Trump wants to give companies better opportunities. They should move production of auto parts back to the US. It takes time to establish that production.
Right now, car manufacturers pay a 25 percent tariff on imported cars. This is a significant cost for several car brands.
In fact, it costs so much that several of the major – and also several smaller – car brands have now stopped exporting cars to the USA.
However, a brand like Ferrari passes the bill on to customers.
A similar tariff on imported auto parts was planned. It was to come into effect on May 3rd, according to previous reports. This creates uncertainty in the industry.
Donald Trump confirmed the considerations to the press on Monday evening Danish time.
"I'm looking at something that could help some of the automakers," he said, according to Bloomberg .
Possible postponement of US car tariffs
"They're switching from parts that come from Canada, Mexico and other places," Trump explained.
– And they need time because they have to make these parts, Trump said of the small help to the car brands.
The news of a possible tariff break was received positively by the stock market. Investors reacted quickly, reflecting the market's concern about the tariffs.
Shares in major U.S. automakers such as General Motors (GM), Ford and Stellantis rose immediately after Trump's comments on Monday, reflecting relief in the industry.
The major automakers have been putting pressure on the Trump administration for weeks. They want more lenient terms. Especially for certain types of car parts.
According to sources close to the negotiations, General Motors, Ford and Stellantis have particularly fought against tariffs on certain low-cost auto parts, arguing that they are necessary for competitiveness.
Restructuring of automobile production in the United States
The same sources mention that the three giants have accepted tariffs. This applies to fully assembled cars. Larger components such as engines and gearboxes are also accepted with tariffs.
The challenge for car manufacturers is the time it takes. Supply chain transformation is a complex process. It requires major investments and planning.
Without a delay, tariffs on auto parts would put further pressure on manufacturers. This would potentially significantly increase production costs. This could ultimately impact consumer prices for new cars.
Although Trump has signaled a possible pause, nothing has been decided yet. The auto industry is therefore awaiting a formal announcement from the administration. The current uncertainty continues to affect manufacturers' planning.
The debate about car tariffs in the US is part of a larger trade policy agenda. It is about strengthening American industry and production. This has been a central political goal for Trump. Also before he was re-elected as president last year.
As American automakers like Ford and Stellantis (owner of brands like Jeep and Ram) navigate the trade policy landscape, you can read much more about how the latter may be looking at a whopping $175 million from a former employee. Read the story right here .
