Tarriff Tango: Trump moves to ease auto tarriffs

United States President, Donald Trump, has decided to exempt some car parts from tariffs under a new destacking trade policy.

Financial Times (FT) reported on Wednesday April 23, 2025, that Washington plans to ease duties on selected components used by American automobile manufacturers.

However, the administration will maintain a 25 per cent tariff on all imported foreign-made cars entering the U.S. market.

A separate 25 per cent levy on parts remains in place but will now take effect starting from May 3.

The report noted Trump’s move follows pressure from U.S. auto executives demanding relief from mounting trade costs.

Domestic automakers warned that tariffs are raising production costs and disrupting complex supply chains essential to U.S. factories.

Stellantis Chairman, John Elkann, criticized the policy, saying both American and European car industries are now facing serious risks.

“Elkann blamed Trump’s trade approach for threatening industry jobs and raising concerns across global automotive networks,” FT stated.

While Washington earlier exempted some autos from reciprocal tariffs, automakers sought deeper concessions to stabilize their business operations.

Trump’s retreat from the full imposition of duties signals a tactical adjustment amid fears of price hikes and job losses.

Industry leaders warned that continued tariffs could push up U.S. vehicle prices and force layoffs in already vulnerable factory towns.

The concessions represent a short-term win for manufacturers but uncertainty lingers about long-term trade stability under Trump’s administration.

Critics argue that such policy reversals create confusion and undermine investor confidence in the U.S. trade direction.

Analysts say Trump aims to balance protectionist goals with economic realities as manufacturers express growing frustration over trade costs.

The automobile sector remains one of the most vocal opponents of tariffs introduced during Trump’s aggressive trade reform drive.

Trump introduced many of these levies during his earlier administration to curb imports and promote domestic production.

Despite criticism, the White House maintains the tariffs protect national interests and reduce reliance on foreign-made vehicles.

Industry observers are watching closely as May 3 approaches, when the new parts levy is scheduled to commence.

Trump’s team may still revise enforcement depending on economic data and pressure from automakers and lawmakers nationwide.

The trade decision arrives amid broader talks about restructuring U.S. tariff policies ahead of the 2026 elections.

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