(Reuters) – U.S. President Donald Trump is planning to spare carmakers from some tariffs following intense lobbying by industry executives over recent weeks, the Financial Times reported on Wednesday, citing a couple of people familiar with the matter.
Car parts would be exempted from the tariffs Trump is imposing on imports from China over fentanyl. Car parts would also be exempt from the tariffs levied on steel and aluminium, in a “destacking” of the duties, according to the report.
The exemptions, however, would leave in place the 25% tariff Trump imposed on all imports of foreign-made cars. The 25% duty on foreign-imported car parts, which is due to take effect on May 3, is also expected to continue, according to the report.
The White House and the big-three automakers did not immediately respond to Reuters’ requests for comment.
The development comes as U.S. automakers scramble to find ways to tackle Trump’s on-again, off-again tariffs, which are expected to raise car prices in the country, dent profits of carmakers and parts suppliers, and disrupt the long-stretched supply chains.
The Center for Automotive Research published an analysis earlier this month saying that Trump’s 25% tariffs on automotive imports will escalate costs for automakers by about $108 billion in 2025.
Tesla, earlier in April, suspended plans to ship components from China for Cybercab and Semi electric trucks to the United States in light of rising tariffs, a person familiar with the matter told Reuters.
This impacts the company’s plan to start mass production of its much-anticipated models.
Ford last week said it halted shipments of some of its vehicles to China, as it started facing the heat from retaliatory tariffs that have made vehicles face taxes as high as 150%.
(This story has been corrected to say that car parts will be exempted from tariffs on steel and aluminum, in paragraph 2)
(Reporting by Abhinav Parmar in Bengaluru; Editing by Alan Barona)
