WASHINGTON: The Trump administration is considering whether to reduce certain tariffs targeting the automotive industry that carmaker 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 aluminium imports, according to sources.
That would eliminate so-called “stacking” of levies.
Another option being studied would fully exempt auto parts that comply with the US-Mexico-Canada trade pact, known as the USMCA, some of the sources said.
Those components don’t 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 earlier reported that the Trump administration is considering reducing tariffs on auto parts and that they might also exempt auto parts bought from China from a 20% tariff applied to the country over a dispute over fentanyl.
The proposals and options remain under consideration and President Donald Trump has not signed off, cautioned the people who asked not to be identified discussing the matter because it isn’t public. His 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 automotive industry.
If adopted, the changes would be a significant reprieve for automakers who have warned of devastating consequences from the Trump 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 United States.
Trump has separately applied tariffs on goods from Canada and Mexico, though exempted USMCA-compliant goods.
The tariffs on autos and auto parts, however, were poised to heavily disrupt the integrated continental supply chain. — Bloomberg
