US automakers push to persuade Trump on tariff exemptions for car parts

US automakers are making a final push to convince the Trump administration to reconsider tariffs set to take effect this week. The industry warns that levies on thousands of parts sourced abroad could severely damage the sector.

Ford Motor Co., General Motors Co., and Chrysler parent Stellantis NV are actively lobbying for exemptions on certain low-cost car components, according to sources familiar with the situation who spoke to Bloomberg. These automakers have met with officials from the White House, the Commerce Department, and the US Trade Representative's office to discuss the exclusions.

The tariffs, intended to bolster the US auto industry, will have widespread effects on American carmakers that rely on low-cost countries for the numerous parts that go into modern cars. Along with a 25% tariff on fully built vehicles, the administration plans to impose taxes on auto components starting April 3.

While Detroit’s automakers have expressed willingness to pay tariffs on complete cars and larger components like engines and transmissions, they are urging the administration to exempt certain parts. They argue that these levies would increase costs by billions of dollars, potentially leading to layoffs and profit warnings — outcomes contrary to Trump's goal of revitalizing the auto industry.

The industry is seeking relief on low-value parts, such as electrical wiring sheaths, which are labor-intensive and often produced in low-wage countries like Mexico. Automakers warn that the combined tariffs could lead to higher car prices, further depressing consumer demand in a market where the average car price is approaching $50,000.

The semiconductor shortage that disrupted the auto industry following the pandemic highlighted the vulnerabilities of the global supply chain for vehicle parts, said Jessica Caldwell, head of insights at Edmunds.com.

“Automakers are understandably concerned that tariffs on all parts could trigger similar issues,” Caldwell said. “Considering the vast number of parts in a vehicle, such disruptions seem almost inevitable. Increased pressure on these smaller suppliers could lead to business failures, potentially causing significant chaos in vehicle production.”

In the last few weeks, many automakers have stockpiled cars in the US to avoid the tariff impact, while car buyers have rushed to dealerships before the levies take effect. Speaking on the tariffs over the weekend, Trump told NBC News that he “couldn’t care less if they raise prices because people are going to start buying American cars.”

As the tariff deadline looms, automakers have sent their top executives to Washington to lobby directly with the administration. Stellantis Chairman John Elkann met with Trump on March 31, while Ford Executive Chair Bill Ford met with Commerce Secretary Howard Lutnick last week. GM CEO Mary Barra, CFO Paul Jacobson, and other executives have also been in discussions with administration officials since the tariffs were first announced.

Trump’s executive order, which introduces the 25% tariffs on fully built cars starting April 3, will see tariffs on major parts like engines, transmissions, and electrical systems starting May 3. Trump also plans to announce reciprocal tariffs on multiple countries on April 2. It remains unclear whether these deadlines represent a hard cutoff for reaching an agreement on auto parts exemptions.

By Tamilla Hasanova