- New car imports were hit with a 25% tariff, and on May 3, the measure will include car parts.
- Some automakers are moving production to the US, while others have stopped shipments.
- Two Michigan auto groups urged Trump to scrap the tariff to protect supply chain stability.
President Donald Trump’s decision to implement a 25% tariff on imported cars, followed by a similar tax on imported auto parts beginning May 3, was never going to land quietly. Touted as a strategy to protect American automakers, preserve domestic jobs, and strong-arm foreign manufacturers into building vehicles on US soil, the policy has managed to ignite backlash both abroad and, most notably, at home.
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The latest pushback comes from the Detroit Regional Chamber and MichiganAuto, two organizations with a deep stake in the industry’s health. They’ve formally urged President Trump to repeal the tariffs, citing the serious risks posed to Michigan’s auto sector by the disruption of global supply chains.
More: Trump “Couldn’t Care Less” If Automakers Raise Prices Over Tariffs
“Michigan’s signature industry and the supply chains and employees that sustain it will continue to endure the uncertainty and disruption of these fluctuating trade policies,” they said in a statement, as reported by Reuters. Last month, they warned that this tax would cause “significant pain” to autoworkers as they could shrink this year’s total car sales by up to 2 million units.
Trump acknowledged on April 9, a week after the measure went into effect, that he might grant an exemption to some US companies, although he didn’t mention the automotive industry specifically.
“There are some that have been hard,” he told reporters when asked about companies asking for exemptions. “There are some that, by the nature of the company, get hit a little bit harder. We’ll take a look at that.”
More: Tesla Sends A Cry For Help To The Trump Admin Over Tariffs
On the same day, Michigan Governor Gretchen Whitmer said that cars should be exempt from tariffs: “Let’s carve out autos and energy, both of which are critical to manufacturers and directly impact people’s wallets.”
While some automakers, such as Hyundai which is investing $21 billion in its US operations and Honda building the next Civic in the US instead of Mexico, chose to go along with Trump’s plan, others, like Audi and Jaguar Land Rover, simply stopped shipping new cars Stateside, at least until the dust settles down.
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Meanwhile, Stellantis’ response was to temporarily shut down production at two plants in Mexico and Canada, which also affects five facilities in the United States that are connected to them, and temporarily lay off 900 US workers.
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