On April 9, President Donald Trump announced a A 90-day halt on most of the mutual tariffs for imported goods He announced the previous week — however, the hold does not encompass a pause on the 25% tariffs on imported cars and car components entering the United States.
These tariffs, along with those on imported aluminum and steel, are part of the duties implemented by the Trump administration that could significantly impact Michigan due to its heavy dependence on the local automotive sector, which is predominantly located within the state.
On April 9, as international markets kept declining, Trump shared on his Truth Social platform that he planned to increase duties on all products entering the U.S. from China to 125%, following China’s move to hike tariffs on American merchandise arriving there to an upper limit of 84%. Concurrently, Trump stated he intended to reduce retaliatory tariffs on approximately 75 other nations down to at least 10% over a period of 90 days. During this timeframe, both parties aimed to negotiate fresh trade agreements.
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At first, it wasn't clear if that hold and decrease to 10% would encompass the 25% tax on cars and car components that Trump declared two weeks prior and put into effect on April 3 at midnight.
However, when addressing questions from reporters outside the White House on April 9th, Treasury Secretary Scott Bessent was queried about whether the suspension encompassed "industry-specific" duties such as those imposed on timber and medicines. He responded with a clear “no.” It should be noted that levies on automobiles, automotive components, along with previously declared taxes on incoming aluminum and steel were classified under these industry-focused tariffs.
The White House subsequently confirmed to the Detroit Free Press, which is part of the USA TODAY Network, that the automotive and other industry-specific tariffs are still enforced.
Nevertheless, numerous experts view the announcement of the halt as a favorable omen for the automotive sector.
"Possibly suspending tariffs is positive news and might boost consumer confidence even though this suspension doesn’t cover the previously declared 25% tax on imported cars announced on March 26th," noted Morningstar automotive industry analyst David Whiston to the Detroit Free Press. "Market sentiment would likely improve with indications suggesting improved conditions for consumers; nonetheless, the threat of higher taxes on foreign automobiles remains intact along with an extra 25% charge applicable to vehicles not meeting USMCA standards." He further explained, “Consumers may still face challenges due to high costs from the 125%, which I understand goes up to 150% specifically for car imports from China. This will continue affecting their ability to afford various products aside from just vehicles.”
However, organizations like MichAuto, which aims to support, maintain, and expand Michigan's automotive sector, expressed disappointment with the developments announced on April 9th.
Regrettably, the 90-day suspension of reciprocal tariffs declared today doesn’t cover the 25% duties imposed on assembled vehicles and parts from April 3rd or other sector-specific tariffs such as those applied to steel and aluminum," stated Glenn Stevens, who serves as both the executive director for MichAuto and the vice president at the Detroit Regional Chamber. "The automotive sector which defines Michigan’s economy along with its supporting supply chains and workforce will keep facing the instability brought about by these inconsistent trade measures.
Stevens mentioned that MichAuto keeps pushing for safeguarding the intricate international supply chain of the automotive sector from damaging disruptions that could undermine its worldwide competitive edge.
"The recalculation of the terms for the USMCA and the upkeep of vital trade relationships it fosters serve as superior instruments for bolstering and expanding the manufacturing sector across North America," stated Stevens.
It still isn't clear precisely how The automotive industry in Michigan will be affected by the tariffs imposed on the auto sector. Because the Trump administration stated that automobiles and automotive parts meeting USMCA standards would stay exempt from tariffs. However, they have not provided additional details on which specific finished vehicles or components entering the U.S. might be deemed compliant according to those agreements.
The White House has stated, though, that Canada and Mexico will continue to be subject to a 25% tariff on most non-USMCA-compliant products. However, energy and potash imports from these countries remain exempted with only a 10% tax applied instead of the previously mentioned 10% across-the-board rate for all other international entities as claimed by Bessent. This clarification was provided by the administration on April 9th. It should also be noted that announcements regarding specific tariffs targeting both Canada and Mexico had been made earlier in the year; additionally, neither country received special mention during the recent announcement involving retaliatory tariffs.
On April 9, the Detroit automakers did not initially offer any remarks. When contacted by the Free Press, the American Automotive Policy Council, representing Ford Motor Co., General Motors, and Stellantis in Washington, D.C., directed them back to their statement from March 26.
"American automobile manufacturers are dedicated to President Trump The focus on boosting automobile manufacturing and employment within the U.S., as envisioned, will persist through ongoing collaboration with the administration to establish lasting measures benefiting Americans. It is essential that tariffs be imposed so they do not lead to increased costs for consumers and maintain the competitive edge of the interconnected North American auto industry—a pivotal achievement of the President’s USMCA deal,” stated Matt Blunt, who serves as the president of AAPC.
The heightened pressure on China is anticipated to affect Michigan companies as well, particularly those in the automotive sector, due to the interconnectedness of international supply chains.
'Shock to Detroit auto industry' — with some optimism
The Trump administration stated that the president decided to reduce the reciprocal tariffs to 10% for a period of three months after approximately 75 nations reached out to U.S. officials seeking negotiations. According to him, only China responded with aggressive retaliation.
Markets jumped Following the announcement that the mutual tariffs, some reaching up to 50%, would be suspended.
Dan Ives, the Managing Director at Wedbush Securities, informed the Free Press that although the "automotive sector can’t celebrate just yet as some other sectors might" with the suspension of tariffs, Wall Street has reacted positively to this development. This suggests that investors believe talks will likely continue regarding the auto tariffs.
“Even though this hits the Detroit automakers hard, it indicates that talks are underway,” Ives stated. “In the upcoming weeks, I anticipate that auto tariffs will take precedence at the negotiating table since such tariffs could devastate Detroit. Both the UAW and the number 313 hold significant importance for the nation and the administration. This seems likely to be the subsequent phase of discussions.”
UAW President Shawn Fain has expressed his backing for tariffs, arguing that these measures will encourage more automotive manufacturing within the nation’s borders and generate employment opportunities. However, Ives contends that the short-term adverse impacts of such tariffs—by escalating expenses for car manufacturers and possibly diminishing vehicle sales—could lead to severe consequences like production halts and job cuts. According to Ives, these outcomes would be extremely detrimental and might compel the administration to take action.
Meanwhile, On April 9, Michigan Governor Gretchen Whitmer traveled to Washington D.C. for a visit. And was anticipated to have an audience with the president. Previously in the day, she gave a speech wherein she strongly criticized Trump's extensive application of tariffs. However, she also mentioned that selective tariffs could be employed to boost manufacturing employment and safeguard sectors such as Michigan’s automobile industry, all without broadly raising consumer expenses or jeopardizing stock market growth.
Reach out to Todd Spangler at tspangler@freepress.com. Track his tweets @tsspangler. .
The article initially appeared in the Detroit Free Press. Auto tariffs and auto part duties stay intact even with Trump's 90-day hold.