President Donald Trump hit pause on the planned reciprocal tariffs on most countries this afternoon. Unfortunately, the automotive industry wasn't so lucky.
Tariffs will remain in effect for so-called "sectoral" tariffs for the time being, Treasury Secretary Scott Bessent said at a news conference this afternoon. Those sectors include automotive imports, as well as lumber, metals, and pharmaceutical products.
For now, at least, a 25% import tax will remain on new cars, so buyers may want to either act soon or try and wait any trade negotiations in hopes prices will go down.
Meanwhile, in another retaliatory move, Trump said he would raise tariffs on Chinese goods to 125%. While very few Chinese-made cars are on sale in the U.S. already due to existing trade tensions, the move is a continued blow to imports of models like the Polestar 2.
Several automotive industry officials, who spoke to InsideEVs on condition of anonymity, intimated that Trump's decision to pause the tariffs came as a total surprise—and little clarity existed at first as to whether car tariffs would be paused as well.
Tariffs on imported cars could not only increase new vehicle prices for consumers, but could also threaten the massive investments automakers are putting into new electric vehicles, software platforms, autonomous driving and more. Many of those technological developments are even being funded by the sale of profitable gas-powered model; price instability and weakened demand for new cars could threaten those investments.
Several automakers, including Hyundai, Toyota and Honda have said that they aren't increasing new car prices—for now, at least. Others, like Volkswagen, Audi, Jaguar Land Rover and Lotus, are holding their newly imported cars at ports until they can determine any potential pricing changes.
Contact the author: patrick.george@insideevs.com
