A MARTÍNEZ, HOST:
As 25% tariffs on goods from Canada and Mexico take hold, President Trump has announced another one-month reprieve.
STEVE INSKEEP, HOST:
The president's latest sudden shift is only for carmakers. They are a huge source of cross-border business. It is common for parts to cross the border several times as American-made cars are assembled. U.S. automakers warned the tariffs would raise the price of their cars by thousands of dollars.
MARTÍNEZ: NPR's Camila Domonoske covers the auto industry. Camila, so, where did this pause come from?
CAMILA DOMONOSKE, BYLINE: Well, it is no secret, the Detroit automakers - so that's Ford, General Motors, Stellantis - they have been lobbying for this for months. Secretary of Commerce Howard Lutnick went on Fox News yesterday, and he said that the Big 3 spoke to the White House.
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HOWARD LUTNICK: They made their pitch. And what they said was, look, we're domestic American automakers, and if you put a 25% tariff on us, and you don't put it on the Germans, and you don't put it on the Koreans, and you don't put it on the Japanese, you're helping everybody but us. So come on.
DOMONOSKE: And, specifically, what the Big 3 had asked for was that these tariffs not apply to either cars or parts for cars that meet the strict requirements for the USMCA. That's the trade agreement between the U.S., Canada and Mexico that Trump negotiated in his first term to replace the previous agreement known as NAFTA. So most cars made in North America meet these requirements, but not all of them. So it's a reprieve for most vehicles made in Canada, Mexico or the U.S. by any automaker, but it would particularly help the U.S. automakers.
MARTÍNEZ: OK, but Trump says that these tariffs are coming back in April for every car, for all cars. So how much does a 30-day pause even help?
DOMONOSKE: Yeah, I mean, look, it's time for companies to figure out some logistics, maybe stockpile a few parts. But it is not nearly enough time to, for instance, move an auto plant to the U.S. to avoid tariffs. I spoke to Angela Gamalski, a trade lawyer who works with the auto industry.
ANGELA GAMALSKI: One of the clients that I've been working with is weighing that exact question - how do we reshore? And their best estimate is looking at two years.
DOMONOSKE: Two years. Meanwhile, this is a policy that was in place for only one day for these vehicles and has been pushed back twice. And even for the rest of the Mexico and Canada tariffs, which are still in place for all these other goods, there is just so much uncertainty about how long they're going to be in place.
MARTÍNEZ: So what does this mean, then, for the people who sell cars and the people that want to be car buyers?
DOMONOSKE: Yeah. So a one-day tariff, obviously, not much. There's still those smaller number of vehicles that are hit by this tariff, and if they come back and stick to all of them, they will make cars even pricier. And, of course, Trump is promising many more tariffs to come. So these particular tariffs on Canada and Mexico, if they stayed in place a while, we would be looking at new cars going up in price, almost certainly by thousands of dollars. Car parts get more expensive, used cars, repairs, insurance get more expensive through ripple effects. The UAW - the Auto Workers Union - did put out a statement this week acknowledging the pain caused by tariffs, but also saying, the working class felt the pain of NAFTA, and tariffs are a way to bring jobs to the U.S. by making it more expensive to manufacture overseas. The White House has said that's the ultimate goal. It's also said the goal is to stop fentanyl at the border. One's long-term, one's immediate. It's really confusing, and it's hard for companies to make plans, including plans to move factories.
MARTÍNEZ: Camila Domonoske covers cars for NPR. Thanks a lot.
DOMONOSKE: Thank you. Transcript provided by NPR, Copyright NPR.
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