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Donald Trump signalled he may offer carmakers some relief from tariffs, in the latest sign the US president will offer carve-outs to selected industries.
Trump said he was “looking at something to help car companies” that were making vehicles in North America.
“They’re switching to parts that were made in Canada, Mexico and other places, and they need a little bit of time, because they’re going to make them here,” Trump said from the Oval Office on Monday.
His remarks came after the administration at the weekend exempted smartphones, laptops and other consumer electronic goods from steep “reciprocal” tariffs, although US officials later said those items could be caught in a later round of levies.
Trump unveiled steep tariffs of 25 per cent on imports of cars and parts last month, in a move that threatens to push up costs for American consumers and upend global auto supply chains.
Under the trading regime, cars and parts made in Canada and Mexico face lower levies and only attract the 25 per cent tariff on their non-US content if they otherwise comply with the rules of the 2020 USMCA trade agreement.
Trump’s comments on Monday suggest he may offer carmakers more time to move supply chains to North America.
Shares in the so-called Detroit 3 carmakers — Ford, Stellantis and General Motors — rose on Monday, with GM and Ford each up about 4 per cent and US-listed shares in Chrysler parent Stellantis gaining 5 per cent.
The trio have been lobbying the administration for months to offer a full exemption from tariffs for any cars and parts that comply with USMCA.
Matt Blunt, president of the American Automotive Policy Council, which represents all three companies, said: “I think there is a growing awareness that some of these parts tariffs are having unintended consequences and make it more difficult to assemble vehicles in the United States.”
Carmakers have also been hit by Trump’s 25 per cent tariffs on imports of steel and aluminium, while some vehicle makers face other duties such as the president’s 20 per cent levies on China.
Blunt said: “There is an understanding that some of the individual tariffs being stacked on parts are undermining the goal of manufacturing in the US, which is a goal we share with the administration.”
Trump on Monday described himself as a “very flexible person”.
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