The administration of US President Donald Trump is considering whether to reduce certain tariffs targeting the auto industry that automaker executives have warned would deal a severe blow to profits and jobs.
One measure would spare automobiles and parts already subject to tariffs from facing additional duties from levies on steel and aluminum imports, people familiar with the matter said.
That would eliminate so-called “stacking” of levies.
Photo: Reuters
Another option being studied would fully exempt auto parts that comply with the US-Mexico-Canada trade pact (USMCA), some of the people said.
Those components do not currently face tariffs, but the administration had planned to tax the non-US share of those parts from Canada and Mexico. Fully sparing those parts would abandon that approach, which would present a potentially herculean logistical challenge.
The Financial Times reported that the Trump administration is considering reducing tariffs on auto parts — and that it might also exempt auto parts bought from China from a 20 percent tariff applied to the nation over a dispute over fentanyl.
The proposals and options remain under consideration, and Trump has not signed off, said the people, who asked not to be identified discussing the matter, because it is not public.
Trump’s tariff policies often change quickly, underscoring the fluidity of policy deliberations, but the discussions offer a signal that the administration is considering ways to narrow the scope of levies affecting the auto industry.
If adopted, the changes would be a significant reprieve for automakers, who have warned of devastating consequences from the tariffs, including higher vehicle prices, production cuts and potential job losses. The industry relies on deeply integrated supply chains spanning North America for the vehicles they sell in the US.
Trump has separately applied tariffs on goods from Canada and Mexico, although exempted USMCA-compliant goods.
The tariffs on autos and auto parts were poised to heavily disrupt the integrated continental supply chain. The US plan, as initially announced, offered something of an olive branch by applying tariffs only on the non-US share of USMCA-traded vehicles, and delaying a potential tariff on parts traded under the pact.
The White House did not respond to a request for comment on Wednesday night.
Asked if he was considering changes to auto tariffs, Trump on Wednesday indicated he was not, while also suggesting he might even increase levies on the Canadian auto sector.
“No, we’re not considering it now, but at some point it could go up,” Trump said. “Because, again, we don’t really want Canada to make cars for us. To put it bluntly, we want to make our own cars, and we’re now equipped to do that.”
Detroit’s automakers for weeks have lobbied the administration to exclude certain low-cost car components from planned tariffs.
Company representatives have told the administration that broad parts duties would drive up costs, and trigger profit warnings and layoffs that would counter Trump’s goal of rebuilding US manufacturing.
Trump plans to travel to Michigan next week.
Automakers are expected to shoulder much of the tariff burden, at least initially, with margins at many parts manufacturers already running thin.
HORMUZ ISSUE: The US president said he expected crude prices to drop at the end of the war, which he called a ‘minor excursion’ that could continue ‘for a little while’ The United Arab Emirates (UAE) and Kuwait started reducing oil production, as the near-closure of the crucial Strait of Hormuz ripples through energy markets and affects global supply. Abu Dhabi National Oil Co (ADNOC) is “managing offshore production levels to address storage requirements,” the company said in a statement, without giving details. Kuwait Petroleum Corp said it was lowering production at its oil fields and refineries after “Iranian threats against safe passage of ships through the Strait of Hormuz.” The war in the Middle East has all but closed Hormuz, the narrow waterway linking the Persian Gulf to the open seas,
RATIONING: The proposal would give the Trump administration ample leverage to negotiate investments in the US as it decides how many chips to give each country US officials are debating a new regulatory framework for exporting artificial intelligence (AI) chips and are considering requiring foreign nations to invest in US AI data centers or security guarantees as a condition for granting exports of 200,000 chips or more, according to a document seen by Reuters. The rules are not yet final and could change. They would be the first attempt to regulate the flow of AI chips to US allies and partners since US President Donald Trump’s administration said it rescinded its predecessor’s so-called AI diffusion rules. Those rules sought to keep a significant amount of AI
Apple Inc increased iPhone production in India by about 53 percent last year and now makes a quarter of its marquee devices there, reflecting the US company’s efforts to avoid tariffs on China. The company assembled about 55 million iPhones in India last year, up from 36 million a year earlier, people familiar with the matter said, asking not to be named because the numbers aren’t public. Apple makes about 220 million to 230 million iPhones a year globally, with India’s share of the total increasing rapidly. Apple has accelerated its expansion in the world’s most populous country in recent years, bolstered
A new worry has been rippling across the stock market lately: Entire businesses, not just their employees, might be thrown out of work. While most economists say fears of an artificial intelligence (AI) job apocalypse are overblown, seismic shifts have happened in the past after big tech breakthroughs. The IT revolution of the 1990s led to a surge in productivity that sped up the US economy for several years. It also rendered companies or even industries largely redundant — from travel agents and stockbrokers to classified advertising and newspapers, or video rental stores. Economists expect AI would deliver higher productivity,
RSS