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Automobiles and parts were largely spared from President Donald Trump’s latest round of tariffs, a win for an industry already reeling from his escalating trade war.
Author of the article:
Bloomberg News
Gabrielle Coppola
Published Apr 02, 2025 • 1 minute read
(Bloomberg) — Automobiles and parts were largely spared from President Donald Trump’s latest round of tariffs, a win for an industry already reeling from his escalating trade war.
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Imported vehicles and parts covered by the 25% tariff targeting the industry — which takes effect on April 3 — will be exempt from Trump’s so-called reciprocal tariffs, the White House said on Wednesday. In addition, Canada and Mexico were spared from the latest duties targeting other trading partners, including major auto-exporters such as South Korea, Japan and the European Union.
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The US will keep existing 25% tariffs on Canada and Mexico, and an exemption for goods that comply with the free trade agreement between the countries will remain indefinitely, officials said. Those levies were initially imposed to urge action to curb the flow of fentanyl. The countries would switch to the new tariff regime if those initial levies are lifted, officials said.
Automakers already face significant potential cost increases and supply chain turmoil from Trump’s new tariff specifically targeting the sector. But the latest push largely sidestepped heaping even more pressure on the industry.
Auto executives for weeks have lobbied the administration to limit the fallout from Trump’s trade war. Ford Motor Co., General Motors Co. and Chrysler parent Stellantis NV most recently have pushed to exclude certain low-cost car components from the planned tariffs.
Industry executives have said that they support Trump’s goal of building more automobiles in the US and expanding the country’s manufacturing base. But moving automobile assembly plants will likely take years, and may never happen for cash-strapped parts suppliers.
Automaker shares fell as Trump announced the much-anticipated measures before paring losses. GM declined 2.5% in after-hours trading, while Tesla Inc. tumbled 3.9% and Stellantis was down 1.5%. Ford was little changed.
—With assistance from Josh Wingrove.
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