Automobile and Auto Parts Tariffs Remain in Place, China Tariff Increases to 145%

The automotive industry did not receive the tariff reprieve that many countries did last week. Coupled with increasing tariffs on China, autos and auto parts face rising cost and supply issues in the coming months. 

On April 9, President Trump announced a 90-day pause on most of the reciprocal tariffs. In a post to Truth Social, President Trump said that reciprocal tariffs for most countries would be lowered to a baseline of 10% for 90 days. However, he also shared that tariffs on all imported goods from China would be raised to 125%. Including a 20% tariff over fentanyl, the total tariff on China is 145%. On April 11, China announced a matching 125% tariff on U.S. goods. 

Treasury Secretary Scott Bessent confirmed that “sectoral” tariffs would not be included in the pause. That group includes autos and auto parts, steel, and aluminum.

David Whiston, an autos analyst at Morningstar, believes that this could potentially be a benefit for the automotive industry, if the tariff pause leads to increased consumer confidence—but consumers will still feel the heat. 

“The 125% rate on Chinese imports (I believe that’s 150% for autos) is still going to hurt consumers’ affordability for goods beyond autos, so plenty of headwinds still out there,” said Whiston. 

Though the auto tariffs remain in place for now, the positive reaction from Wall Street over the 90-day pause could indicate potential for negotiations to be made, which Wedbush Securities Managing Director Dan Ives believes will center on auto tariffs. 

“So even though it’s a gut punch to the Detroit automakers, it shows that negotiations are happening,” Ives said. “I expect that auto tariffs are going to be front and center on the table over the coming weeks because Detroit would be decimated by these auto tariffs and the UAW and the 313 are very important for this country and for the administration. I think that’s going to be the next step.”