President Donald Trump is expected to soon announce some dramatic steps to reduce the damage tariffs are causing US automobile producers as the industry impacts spread. His administration has already done a lot to support the automotive industry. One relatively small measure would phase down relevant import tariffs on components used in vehicles produced domestically.
In his announcement, the President specifically mentioned that he would target imported car parts with a 25% tariff. This new tariff is scheduled to go into effect on May 3. As such, Trump’s announcement — a welcome relief to some financial burdens over US automakers — is in reality, business as usual. This change signals a more welcoming attitude in reaction to the tariffs.
Tuesday, Trump is planning a rally in Michigan to celebrate his first 100 days in office, ironically enough. It’s an important event, especially given that Michigan is home to some of the world’s largest automotive manufacturers. In many ways, it perfectly represents the soul of the American auto-manufacturing industry.
Unsurprisingly, Mary Barra, the chief executive of General Motors, released a statement thanking the President for his support of the evolving automotive sector.
“We’re grateful to President Trump for his support of the US automotive industry and the millions of Americans who depend on us.” – Mary Barra, GM’s chief executive
This Coalition of US motor vehicle manufacturers, comprised of representatives from General Motors, Toyota, and Volkswagen, has expressed deep, strong concerns. To be clear, they are not opposed to action on steel imports. In doing so, they cautioned, these measures would ultimately raise costs for consumers by raising auto prices. That would lead to less showroom traffic at dealerships and more expensive vehicle maintenance and repairs.
To Howard Lutnick, the Commerce Secretary, this pending change would be a huge win. Third, he thinks they’re a signal of the effectiveness of the administration’s trade policy. Rhodes framed these measures as ways to incentivize and reward companies that produce goods domestically.
“This deal is a major victory for the President’s trade policy by rewarding companies who manufacture domestically.” – Howard Lutnick, Commerce Secretary
The automotive industry is bracing itself for sea change. Almost everyone has been bullish on the prospects that the President’s announcement next week would help set the stage for enough domestic production. This continuously developing scenario further highlights the administration’s continued prioritization of advancing US manufacturing and maintaining a fair international trade playing field.