trump considers tariff relief: will auto prices drop?
Washington, Thursday, 24 April 2025.
President Trump is weighing exemptions on tariffs for automakers. The move follows lobbying from industry groups fearing a 25% tariff on imported parts set to take effect May 3. Industry insiders worry these tariffs could jeopardize domestic production and increase repair costs. General Motors CEO Mary Barra is asking for clarity. Meanwhile, Mazda is already halting production in Alabama in response to the tariffs, with potential impacts for consumers in Canada.
industry response and market outlook
Shares of several automakers and their suppliers saw marginal gains in after-hours trading following the news of potential tariff exemptions [1]. However, Trump also mentioned the possibility of increasing existing tariffs on cars imported from Canada [1]. Six U.S. automotive industry policy groups, representing franchised dealers, suppliers, and major automakers, have actively lobbied the Trump administration to reconsider the tariffs on auto parts [1][2]. These groups argue that the levies could disrupt U.S. automotive production, potentially leading to production stoppages, layoffs, and bankruptcies among suppliers [2].
potential impact on consumers and repair costs
Experts predict that Trump’s tariffs could increase both new car prices and auto repair expenses [6]. A 25% tariff was already imposed on imported passenger vehicles in April [6]. A separate 25% tariff on auto parts is scheduled to begin on May 3 [6]. Cars.com editor-in-chief Jenni Newman noted that many parts used for vehicle repair and maintenance are imported [6]. Newman suggests that suppliers will likely pass increased costs onto repair shops and dealerships, which could translate to higher repair bills and longer wait times for consumers [6].
mazda’s production halt
Mazda is temporarily pausing production of its CX-50 SUV at its Huntsville, Alabama plant due to the tariffs [5]. The production halt, set to begin on May 12, will affect models intended for the Canadian market [5]. The CX-50 accounts for approximately 15% of Mazda’s total passenger vehicle sales in Canada, which totaled about 72,000 units in 2024 [5]. A Mazda Canada spokesperson stated the company has a limited supply of CX-50 inventory to continue sales [5]. Mazda intends to fully utilize its U.S. plant and will monitor government negotiations and policy developments [5].
tariff policy concerns and lobbying efforts
Concerns exist regarding the transparency of the Trump administration’s tariff policy, with some observers suggesting that politically connected firms may be benefiting from exemptions [7]. Reyes Holdings, a Coca-Cola bottler and major Republican donor, benefits from an exemption on polyethylene terephthalate (PET resin) [7]. Reyes Holdings hired a lobbying firm with ties to the Trump White House [7]. The Wall Street Journal’s editorial board has criticized the tariff exemption process [7]. Coca-Cola has lobbied on tariffs and donated approximately $250,000 for Trump’s inauguration [7].