By CHRISTIAN FRANKLIN, Opinion Editor
President Donald Trump’s recent decision to relieve some of the pushing of tariffs for imported cars and parts, may sound like a lifeline to struggling automakers.
But in reality, it is a mistake . Many people assume that the victories are for US manufacturing but unfortunately, it is not. When it is calculated as a walk back in a self-sufficient wound, meaning car companies and consumers pay the price. With this change taking effect it offers a short term relief to American automakers, but it sure does false sort of a long-term stability that the industry needs.
According to a report by Anna Swanson and Jack Ewing in the New York Times, the president signed two executive orders aboard Air Force One en route to Michigan, which granted Limited exemption from the previous tariff that is being enforced.
The new conditions of the terms are that car makers will be able to deduct 15% of import cost to a vehicle sticker price and 10% for the next year. Then at that point the tariffs will resume and the message is giving automakers, “a little flexibility” meaning that they have limited time to prepare before they are hit with the imposed tax. This is not exactly a vote of confidence in America’s industry, it is now a threat with a temporary concession.
The new order does not eliminate the original 25% tariff tax, which is specifically on imported vehicles reported to be done earlier this month. Also, they don’t even touch higher prices since companies must pay for a raw material like steel and aluminum, and both have been hit with the tariff.
With Swanson and Ewing highlighting that automakers are still absorbing the cost, and the totals are already beginning to be passed onto consumers. The industry of auto in the United States has operated through a system in a global supply chain. Which means cars simply in Michigan or Ohio often rely on parts that are made in Canada, Mexico or Asia.
The taxes being pushed and forced onto companies which bring the operation to America soil, is very costly and unrealistic to maintain in today’s demanding economy.
Swanson and Ewing report of auto makers being lobbied by the administration in recent weeks warning that the tariffs will force job cuts and encourage price hikes, resulting in production delays.
Following General Motors, they recently made a pull and its 2025 earnings forecast is assumed to be unpredictable because of the impact of tariffs. The company even just released the delay of its first quarter result that needs to be re-calculated for its final projections.
Analysis from Bernstein quoted in the original New York Times article said plainly. “Relief today doesn’t fix the long-term challenge. US car prices are heading higher just as economic momentum fades.”
What that means is higher cost not just for new used cars but also for insurance and even repair expenses will directly hit the working and middle class Americans.
The most shocking thing is that the administration seems to be more politically pressured than using economic logic.
Earlier this month in the White House was called to roll back tariffs on smartphones after pushback from companies like Apple.
The case continued with Swanson and Ewing as they described repeated phone calls and data from Ford and GM, and Stella before Trump‘s relented.
American manufacturing deserves support, but supporting it doesn’t mean increasing the economic walls and pushing companies to rely on international trade.
As Swanson and Ewing make it clear in their reporting that the tariffs temporary relief may ease the pain for now, but it does not fix the problem.
Until the administration embraces a more togetherness approach it leaves American automakers, stuck with rising costs, and now shrinking global competitiveness.