[Text by Guancha Observer Network, Ruan Jiaqi]
On the local time of the 24th, the "Financial Times" of the UK quoted informed sources as saying that under the strong lobbying of industry executives in recent weeks, US President Trump is planning to exempt automobile manufacturers from some tariffs.
According to two sources, in the automotive industry, Trump may exempt a 20% tariff on auto parts imported from China and also exempt steel and aluminum tariffs for auto parts manufacturers. However, this exemption will retain Trump's 25% tariff on all foreign-made complete vehicles. Another 25% tariff on auto parts, which is scheduled to take effect on May 3rd, will continue to be implemented.
The report described this new development as "cancel stacking" (destacking) by the US side.
Separately, according to CNBC, the White House confirmed to it on Wednesday that Trump is considering exempting some tariffs for automobile manufacturers. While Bloomberg reported that Trump denied this during a press conference at the Oval Office on Wednesday, saying, "We haven't considered this issue yet."
Despite the inconsistent statements from the US side once again, the British media viewed this as another "concession" made by Trump in the trade war.
The Financial Times reported that this tariff deferral measure indicates that after widespread concerns about tariffs pushing up US car prices, disrupting supply chains, and causing unemployment, Trump has retreated somewhat from his radical tariff policies. It is also the latest sign that Trump is willing to offer "special treatment" (carve-out) to specific industries after triggering significant market sell-offs globally.
On April 23rd local time, Trump spoke at the Oval Office in the White House. Video screenshot from US media.
Trump announced so-called "reciprocal tariffs" excluding six major categories of goods, including steel and aluminum products, automobiles and parts, etc., in early April.
However, the automotive industry still needs to face 25% steel and aluminum tariffs, as well as a 25% tariff on all imported cars. Imported auto parts from China also need to bear an additional 20% tariff. Additionally, the 25% tariff on auto parts, expected to take effect on May 3rd, will further burden the industry.
This series of tariffs will increase domestic car prices in the US, reduce profits for car manufacturers and parts suppliers, and disrupt already lengthy and complex supply chains. Reuters cited a report from the Center for Automotive Research (CAR) this month indicating that Trump's 25% tariff on car imports would increase costs for manufacturers by approximately $108 billion this year.
The Financial Times reported that over the past week, automotive industry executives have intensified their criticism of tariffs. John Elkann, chairman of Stellantis, warned that Trump's trade policies "place the US and EU automotive industries at risk."
Another senior executive in the automotive industry also stated: "We have urged the government not to repeatedly strike us with these additional tariffs... because they truly endanger the health of our entire industry."
In response to the impending auto parts tariff, this week, the top six policy groups representing franchised dealers, suppliers, and almost all major automakers in the US automotive industry have rarely united to pressure the Trump administration against the impending auto parts tariff policy.
According to CNBC, the leaders of the Alliance for Automotive Innovation, the American International Automobile Dealers Association, the American Automotive Leadership Council, the Engine & Equipment Manufacturers Association, the National Automobile Dealers Association, and the American Automotive Policy Council, in a joint letter, pointed out that many auto suppliers are already "in trouble" and cannot afford the additional cost increases, which could trigger broader industry issues.
In the letter, they warned that "most auto suppliers are not prepared for the chaos caused by sudden tariff policies; many are struggling financially and face production shutdowns, layoffs, and bankruptcy. If one supplier fails to deliver, the entire automotive production line will shut down."
Emphasizing in the letter dated April 21st, the six organizations urged the Trump administration to exempt auto manufacturers from parts tariffs, following the tariff relief policies for the consumer electronics and semiconductor industries. The recipients were US Treasury Secretary Janet Yellen, Commerce Secretary Gina Raimondo, and Trade Representative Ambassador Katherine Tai.
The letter emphasized that these six industry organizations represent the largest manufacturing sector in the US, providing ten million jobs across all fifty states and injecting $1.2 trillion annually into the US economy.
The report particularly noted that for the automotive industry, this joint letter, even if not unprecedented, is unusual because "such organizations rarely — if ever — jointly sign the same statement."
As criticism of the tariff policies grows louder in the automotive industry, news of Trump's plan to exempt some tariffs began to spread. According to Bloomberg, after the news of the deferral of auto parts tariffs was released, many automaker and supplier stocks rose slightly in post-market trading on Wednesday. General Motors rose by 6.1%, Ford Motor Company rose by 3%, and Stellantis' US shares rose by 6.8%.
However, contrary to the White House's statements, at the White House press conference on Wednesday (the 23rd), when asked whether he considered changing auto tariffs, Trump said, "No, we're not considering it now."
Meanwhile, Trump hinted at possibly increasing taxes on imported Canadian cars.
He told reporters in the Oval Office, "When I impose tariffs on Canada — they pay a 25% tariff — but for cars, the tariff may increase." "Because we don't want Canada producing cars for us. With all due respect, we don't want your cars; we want to make our own cars, and we have the capability to do so now."
Swamy Kotagiri, CEO of Magna, a Canadian-based auto supplier, clearly disagreed with this stance.
Last week, at a meeting near Detroit, addressing Trump's argument about "automotive manufacturing returning to the US," he criticized, "This is not something that can be done with just flipping a switch. We must approach this issue pragmatically. I don't understand how you can just pick something up and start acting. It sounds easy, but it's not."
This article is an exclusive contribution from the Guancha Observer Network and cannot be reprinted without permission.
Original source: https://www.toutiao.com/article/7496706966301671971/
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