President of the United States Donald Trump announced the possibility of temporarily suspending the 25% tariffs on imported cars to give the automotive industry time to shift production to the U.S. This initiative has been supported by leading industry players, who point out that restructuring supply chains requires additional time.
This is reported by Finway
During a meeting in the Oval Office with President of El Salvador Nayib Bukele on April 14, Trump hinted at the possibility of temporarily lifting tariffs on the automotive sector. Earlier this month, he imposed a 25% tariff on imported cars, explaining that it was intended to stimulate domestic production.
While some tariffs for other sectors and countries have been eased, the automotive sector remains under their influence, raising concerns among automakers, as a significant portion of components is still supplied from Canada, Mexico, and other countries.
Matt Blunt, president of the American Automotive Policy Council, which represents Ford, General Motors, and Stellantis, supported Trump’s initiative, emphasizing that “broad tariffs on parts could undermine the shared goal of building a strong automotive industry in the U.S.,” and noted that “many changes in supply chains require time.”
Some automakers, such as Ford and Stellantis, are already adapting to the new conditions by entering temporary price agreements with their workers. General Motors announced a strategic increase in production volumes in the U.S., including expanding pickup production in Indiana. Additionally, the company canceled a planned shutdown at its Tennessee plant, indicating a commitment to stable operations even under tariff pressure.
Other companies, such as Hyundai, have promised not to raise prices for at least two months to maintain consumer trust, while British Jaguar Land Rover has suspended shipments to the U.S. Market reaction has been positive: shares of Ford, General Motors, and Stellantis rose by 3-6%, while Rivian Automotive increased by 4.9%.
Even companies that are less dependent on imported parts, such as Tesla, showed stable results. Shares of other market participants, including Toyota, Honda, and Lucid Group, also increased. Industry officials characterized Trump’s statements as “an acknowledgment that the situation is becoming challenging for the industry.” It is clear that the transition to fully localized production will require time, investment, and favorable conditions from the government.