U.S. automakers Ford Motor Co., Chrysler parent Stellantis NV and General Motors Co. are lobbying the Trump administration to exempt certain low-cost car parts from the planned tariffs. Executives have consulted with the White House and the office of the U.S. Trade Representative to examine the exclusion, sources said.
President Donald Trump’s tariffs, designed to strengthen the American auto industry, are likely to impact U.S. car manufacturers who have increasingly sourced components from low-cost countries for their modern vehicles. The administration intends to impose taxes on auto components in addition to the upcoming 25% tariffs on fully assembled vehicles, scheduled to begin in April 3.
Detroit automakers have accepted that they are prepared to pay tariffs on finished vehicles and major parts such as engines and transmissions. However, company representatives have informed the administration that tariffs on parts would result in cost increases totaling billions of dollars, leading to layoffs and profit warnings that would run counter to Trump’s goal of building up the industry, one of the people said. On March 31, Trump refrained from commenting on whether the administration would exempt certain car parts from the tariffs. He noted that he had already offered automakers “a break” by delaying the tariffs for a month.
With the tariff deadline nearing, automakers have recently dispatched their senior executives to Washington to engage in recent days to lobby directly with the administration, as reported by sources. On March 31, Trump said that he held negotiations with Stellantis Chairman John Elkann. Ford Executive Chair Bill Ford, great-grandson of architect Henry Ford, held a meeting last week with Commerce Secretary Howard Lutnick. Chief Financial Officer Paul Jacobson, GM CEO Mary Barra and other executives have been conferring with government officials since the president announced the tariffs.
According to Trump’s executive order, 25% tariffs on fully built cars would begin April 3, but levies on major parts like engines, Transmissions and electrical systems are set to start on May 3. Additionally, the president intends to announce reciprocal tariffs affecting several countries on April 2. It’s uncertain if those milestones serve as deadlines for reaching an agreement on auto parts. The automakers believe there’s an opportunity to obtain tariff relief on parts since that part of Trump’s executive order was finalized late during the drafting process on March 26.
Since that time, executives and their lobbyists have been striving to inform the administration about the economic intricacies of the global auto parts network production. For instance, inexpensive commodity items such as video screens are primarily produced abroad, where labor costs are lower. If every auto part manufactured overseas faced import taxes, the U.S. market would have hardly any tariff-free cars available.
To gain Trump’s favor, automotive representatives are highlighting their support for his objectives of increasing automobile production within the U.S. and boosting America’s manufacturing sector. They have committed to developing strategies to achieve this, but their immediate focus is obtaining a reduction in parts costs first.
