President Trump Reportedly Kicks the 25 Percent Auto Tariff Can Six Months down the Road

Alexander Stoklosa
Photo credit: Mario Tama - Getty Images

From Car and Driver

  • Donald Trump is expected to wait up to six months before he decides whether to impose tariffs on imported cars and car parts, Automotive News reported today.
  • The decision had been expected this Saturday, May 18.
  • Putting a 25 percent tariff on car imports has been unpopular with carmakers, politicians on both sides of the aisle, and much of the public.

President Trump has a lot to tweet about when it comes to tariffs, imports, China, and the like, but he is reportedly waffling on his intention to slap a 25 percent tariff on imported cars and car parts. In fact, multiple news sources are reporting, he will wait up to six months to make a final decision on the matter; originally, the promised tariffs were to be decided on by May 18.

The delay is sure to be welcomed across the board. A permanent tabling of the idea would be even more popular, because another six months of deliberations will merely drag out the auto industry's uncertainty about how things will play out. (Uncertainty doesn't mix well with the sort of long-term planning required to develop, build, and eventually sell new cars and trucks.) Automakers, then, have lobbied Trump to abandon the tariffs altogether; so, too, have Democratic and Republican lawmakers.

Why? Because a tariff is essentially passed on to consumers-people who live in districts represented by the whole of the political spectrum-in the form of higher prices. Not only could John and Jane Q. Car Buyer have to pay 25 percent more for their imported car, John and Jane Q. Automaker could also have to pay 25 percent more for foreign-made parts, a cost that, again, will most likely be passed on to John and Jane Q. Car Buyer.

Photo credit: Mark Wilson - Getty Images

While Trump cites patriotic motives and has even played the "national security" card, the issue isn't as black and white as "Buy American!" The president and his team are operating on the simple logic that tariffs on imported cars and car parts would punish foreign makers, to the benefit of those brands that call America home. In pushing this narrative, the administration is either willfully ignorant of or misinformed about the reality that a great many domestic car brands source their vehicles and parts from outside the U.S. So if you think that Ford, General Motors, or Fiat Chrysler products won't be affected by the tariffs, think again. Need we remind you of the list of the most American cars and trucks you can buy, as determined by parts count? Or how about the numerous foreign brands that build cars here in the U.S., in some cases exporting those vehicles to other markets?

Automotive News, citing unnamed sources, said the delay is due to Trump's unwillingness to "further antagonize allies as he ramps up his trade war with China." The publication also said the Republicans are "threatening to move forward with legislation to limit the president’s tariff authority, with many in Congress saying duties on cars, which are widely opposed by the auto industry, would be a step too far." However this is decided, it is certain the auto industry-and car buyers-need to pay very close attention.

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