White House Says Trump Considers Exempting Automakers from Some Tariffs

TMTPOST -- The White House on Wednesday confirmed that U.S. President Donald Trump is considering granting automakers expemptions from some tariffs.

Credit：Xinhua News Agency

Trump is considering exemptions for automakers from some tariffs announced by his administration, the White House confirmed to CNBC.

Earlier Wednesday, the Financial Times suggested Trump will retreat on his most aggressive tariffs amid fears about surges in U.S. car prices, disruption of supply chains and job losses.

It was reported Trump is set to exempt car parts from the tariffs that the president is imposing on Chinese imports to counter fentanyl production, as well from those levied on steel and aluminum — a “destacking” of the duties.

The exemption would not affect a 25% tariff imposed on all imports of cars made outside U.S., and would leave in place a separate 25% levy on auto parts, which is due to come into force on May 3, according to the report.

While the Trump administration has already shielded autos from the sweeping worldwide reciprocal tariffs, the report noted U.S. auto manufaturers these weeks have pushed for further exemptions.

Trump late March signed an executive proclamation to impose a 25% tariff on all automobile imports, effective on eastern daylight time April 3 at 12:01 a.m. He said that the tariff hit “all cars that not made in the United States”, and if the cars are “made in the United States, it’s absolutely no tariff.”The president confirmed on April 2 the auto tariffs entered effect as scheduled.

The exemptions, if they are materialized could be a major reprieve for automakers. Wall Street and automotive analysts expected the auto tariffs would lead to a drop in vehicle sales in the millions, higher new and used vehicle prices, and increased costs of more than $100 billion for the industry.

The Trump administration has exempted from tariffs on certain products including semiconductors. The U.S. Customs and Border Protection (CBP) announced in an updated guidance on April 11 that the government has exempted smartphones, computers and other electronic products from its reciprocal tariffs.The document stated that the exemption applies to electronic products entering the United States after April 5, and reciprocal tariffs already paid can be refunded upon request.

The White House said on April 12 the exemptions were made because Trump wants to ensure that companies have time to move production to the U.S. Trump “has made it clear America cannot rely on China to manufacture critical technologies such as semiconductors, chips, smartphones, and laptops”, said White House deputy press secretary Kush Desai in a statement.

The 20 product categories listed in the CBP guidelines are apparently exempt from the 125% tariff imposed by Trump on Chinese imports and the 10% baseline tariff on imports from other countries.

However, Trump on April 13 indicated the exemptions from semiconductors and other imported products from reciprocal tariffs are temporary.

The president the same day spoke with reporters officials would discuss tariffs on products like iPhones and tablets with companies "because you have to show a certain flexibility, nobody should be so rigid."