President Trump suggested on Monday that he might temporarily exempt the auto industry from tariffs he had previously imposed to give carmakers time to overhaul their complex supply chains.
Mr. Trump told reporters gathered in the Oval Office that automakers “need a little bit of time” to shift production from Canada, Mexico, and other locations to the United States.
Car manufacturers’ supply chains are inextricably linked to other countries, making it nearly impossible to manufacture vehicles entirely in the United States.
According to experts, a fully American-made car does not exist because automakers in the United States rely on key trade partners such as Canada, Mexico, and China for many of their parts.
Mr. Trump has previously reversed course on tariffs, causing financial market volatility and prompting economists to raise the likelihood of the US economy entering a recession this year.
According to experts, Mr. Trump’s 25% tariffs on foreign-made cars, designed with the intention of reshoring auto manufacturing to the United States, are likely to raise car prices by thousands of dollars.
According to Wedbush Securities analyst Dan Ives, the price of a typical car could rise by $5,000 to $10,000 “out of the gates” as a result of the new tariffs.
