Trump considers pause on auto tariffs to give carmakers more time to relocate production

President Trump on Monday suggested he might temporarily exempt the auto industry from tariffs he previously imposed on the sector 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 relocate production from Canada, Mexico and elsewhere to the U.S.  

Car manufacturers’ supply chains are tightly interwoven with other nations, making it almost impossible to make vehicles entirely in the United States. 

Because U.S. automakers source many of their car parts from key trade partners, including Canada, Mexico and China, a fully American-made car doesn’t exist, according to experts. 

Mr. Trump has previously reversed course on tariffs, causing upheaval in financial markets and leading economists to raise the odds of the U.S. economy entering a recession this year. 

The 25% tariffs on foreign-made cars, which Mr. Trump designed with the intention of reshoring auto manufacturing to the U.S., is likely to boost car prices by thousands of dollars, experts say.

The price of a typical car could rise by between $5,000 to $10,000 “out of the gates” due to the new tariffs, according to a March 31 estimate from Wedbush Securities analyst Dan Ives.