Automakers aren’t rushing to move production to US factories to avoid tariffs

President Donald Trump predicted Wednesday that the auto tariffs he is about to impose will lead automakers to shift their car production, and their supply chains, to American factories. But it’s not that easy. Not by a long shot.

President Donald Trump predicted Wednesday that the auto tariffs he is about to impose will lead automakers to shift their car production, and their supply chains, to American factories. But it’s not that easy. Not by a long shot. A wide variety of tariffs have either already hit, or are about to hit, the auto industry, potentially adding thousands of dollars to the cost to build and buy a new car. Duties of 25% on steel and aluminum imports are already in effect, raising the price of aluminum and steel, even when those metals are produced at US mills. On Wednesday, Trump announced fresh levies set to take effect April 3 on cars and auto parts from Asia and Europe, as well as those from Canada and Mexico. The Canadian and Mexican tariffs will be the most damaging to most automakers, which depend on those neighboring countries not just for some of their production, but for a large share of the parts they use to assemble cars. “If you build your car in the United States, there is no tariffs,” Trump told journalists at the Oval Office. But in fact, the executive order he was signing placed tariffs on more than half of the parts used to build cars at US plants. “A lot of companies are going to be in great shape because they’ve already built their plants, but their plants are under utilized,” he said. “So they’ll be able to expand them inexpensively and quickly. Others will come into our country and build and they’re already looking for sites. We’re signing an executive order that is going to lead to tremendous growth in the automobile industry.”