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Trump suggests he may grant tariff relief to automakers
MAINICHI   | April 15, 2025
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The national flag of the United States of America (Mainichi)
WASHINGTON (Kyodo) -- U.S. President Donald Trump suggested Monday he could grant relief to automakers reeling from his hefty tariffs to help them rearrange their supply chains.
"I'm looking at something to help some of the car companies, where they're switching to parts that were made in Canada, Mexico and other places, and they need a little bit of time, because they're going to make them here," Trump told reporters gathered in the Oval Office.
His remarks could result in further backpedaling on his series of steep tariffs on foreign goods. In early April, an additional 25 percent tariff on all automobiles made outside the United States took effect, which has significantly affected Japanese, German, South Korean and other foreign carmakers as well as their American rivals.
The tariff also covers engines and other key auto components, but such items have been granted a one-month reprieve until May 3.
"I'm talking about things like that," Trump said, when asked about the possibility of temporary tariff exemptions for some products. "I'm a very flexible person. I don't change my mind, but I'm flexible, and you have to be."
Trump also said he does not want to hurt anybody. "But the end result is we're going to get to the position of greatness for our country with the greatest economic power in the world, if we're smart," he said.
Last week, Trump abruptly paused for 90 days the imposition of his administration's so-called reciprocal tariffs, which targeted major U.S. trading partners with much higher import tax rates.
The pause, which did not apply to imports from China or sector-based tariffs such as the new auto levy, was announced amid financial market chaos, only about 13 hours after the country-specific duties took effect.
Both foreign and American automakers produce a considerable percentage of their vehicles outside the United States and procure parts from around the world.
It is not a quick or easy process for the auto industry to relocate production bases to the United States, as desired by Trump, given that automakers use complex supply chains and also need to make huge investments in technology and plants before they introduce new models.
For Japan, Trump's new auto tariff, bringing the tax rate on passenger vehicles up to 27.5 percent from the previous 2.5 percent, is especially devastating.
It remains unclear if Trump's possible special treatment for the auto industry would cover Japanese or other foreign brands.
Japan has been given priority in tariff negotiations with top officials of the Trump administration during the 90-day suspension.
Ryosei Akazawa, Japan's economic revitalization minister, is expected to arrive in Washington later this week to launch full-fledged tariff negotiations with the United States.
Akazawa is set to meet with U.S. Treasury Secretary Scott Bessent, the point man for the talks with Japan, and it is almost certain that he will seek exemptions from Trump's tariff regime for Japanese automakers.
Last year, Japan shipped more than 6 trillion yen ($42 billion) worth of vehicles to the United States, accounting for the largest portion, at 28.3 percent, of its total exports to the United States, according to Japanese trade data.
Of the roughly 16 million new vehicles sold in the United States in 2024, about half were imports, while among the remaining 8 million units, more than half were produced with foreign parts, according to the White House.
Trump administration officials have asserted that only about 25 percent of vehicles and parts can therefore be deemed as made in the United States, complaining that the country, once a manufacturing power, has become a place where cars are merely assembled.
On Monday, Trump also hinted again that his administration is preparing new tariffs on semiconductors and pharmaceuticals on national security grounds.
With respect to the "reciprocal" tariffs, U.S. Customs and Border Protection late last week published a list of some high-tech products exempted from the protectionist measures, including smartphones and computers.
However, Trump and his officials have indicated that smartphones and other electronics imported to the United States are not excluded, with U.S. Commerce Secretary Howard Lutnick saying Sunday they will ultimately be treated within the scope of tariffs on the semiconductor sector.
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