Trump hints at auto tariff reprieve as companies 'need time' to adjust supply chains

Seeking Alpha

2025.04.15 08:42

I'm PortAI, I can summarize articles.

Donald Trump has suggested a possible delay in the 25% tariffs on auto imports, acknowledging the need for time as companies adjust their supply chains. This announcement positively impacted automaker stocks, with Stellantis rising 5.6% and Ford 4.1%. Industry representatives express concern that broad tariffs could harm the American auto industry, while economist Art Laffer warns of potential disruptions to supply chains and increased consumer costs if tariffs are imposed without exemptions.

Donald Trump has floated a potential reprieve for the 25% tariffs on automobile and auto part imports, given the industry's deeply-integrated North American supply chains, signaling yet another shift in the president's policy stance.

"I'm looking at something to help some of the car companies with it," Trump told reporters on Monday. "They're switching to parts that were made in Canada, Mexico and other places… they need a little bit of time, because they're going to make them here."

Trump's signal was enough to lift top automakers' shares to end on a higher note on Monday: Stellantis (NYSE:STLA) +5.6%, Ford (NYSE:F) +4.1%, GM (NYSE:GM) +3.5%, Honda (NYSE:HMC) +1.9%, Toyota (NYSE:TM) +1.5%.

"We appreciate the ongoing dialogue with the administration," said Matt Blunt, president of American Automotive Policy Council, an industry group representing the Big Three automakers. "There is increasing awareness that broad tariffs on parts could undermine our shared goal of building a thriving and growing American auto industry, and that many of these supply chain transitions will take time."

Economist Art Laffer last month noted that the 25% tariffs would severely disrupt North American supply chains that have been strengthened by the U.S.-Mexico-Canada Agreement.

He said imposing the tariff without a permanent USMCA exemption would lead to higher consumer costs, significant investment losses and inefficient production shifts, as well as erosion of industry competitiveness.