Those tariffs, as well as those on imported aluminum and steel, are among duties already imposed by the Trump administration that could greatly affect Michigan because of its oversized reliance on the domestic auto industry largely based in the state.
As global markets continued to tumble on April 9, Trump posted on his Truth Social site that he was raising tariffs on all imported goods from China to 125% due to that country's decision to raise tariffs on American goods coming into that country to up to 84%. At the same time, Trump announced he was lowering reciprocal tariffs on some 75 other nations to a floor of 10% for 90 days, during which time the United States and those countries would try to reach new trade deals.
It was initially unclear whether that pause and reduction to 10% would include the 25% tariff on autos and auto parts that Trump announced two weeks ago and implemented on April 3 at midnight.
But speaking outside the White House on the afternoon of April 9, Treasury Secretary Scott Bessent was asked if the pause included "sectoral" tariffs like those on lumber and pharmaceuticals. He said, "no." Auto, auto parts and earlier announced tariffs on imported aluminum and steel are considered part of those sectoral tariffs.
The White House later provided the Detroit Free Press, part of the USA TODAY Network, confirmation that the auto and other sectoral tariffs remain in place.
Still, many analysts are reacting to the news of the pause as a positive sign for the auto industry.
"Pausing tariffs is good news and could help consumer confidence despite the pause not including the 25% foreign auto tariff announced March 26," Morningstar autos analyst David Whiston told the Free Press. "Any sign to think consumers are better off will be welcomed enthusiastically by the market, however, foreign auto tariffs are still out there as is an additional 25% for non-USMCA compliant vehicles," a reference to the U.S.-Mexico-Canada Agreement on trade. "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," Whitson added.
But others, such as MichAuto, the group that works to promote, retain and grow Michigan's auto industry, said April 9’s development was a disappointment.
“Unfortunately, the 90-day pause on reciprocal tariffs announced today does not extend to the 25% tariffs on assembled vehicles and components implemented on April 3 or other sector-based tariffs, like those on steel and aluminum,” said Glenn Stevens, MichAuto executive director and vice president of Detroit Regional Chamber. “Michigan's signature industry and the supply chains and employees that sustain it will continue to endure the uncertainty and disruption of these fluctuating trade policies.”
Stevens said MichAuto continues to advocate for protecting the automotive industry's complex international supply chain framework from harmful fragmentation that weakens its global competitiveness.
“The prompt renegotiation of the USMCA and maintenance of the key trade partnerships it enables are better tools for strengthening and growing the North American manufacturing economy,” Stevens said.
It also remains unclear exactly how Michigan's auto industry will be hit by the auto sector tariffs because the Trump administration has said that autos and auto parts that are considered compliant with USMCA would remain tariff-free. The administration hasn't explained further what finished vehicles or other components coming into the U.S. it may or may not consider compliant under the terms of that deal.
The White House clarified, however, that Canada and Mexico still face a tariff of 25% generally on non-USMCA compliant goods, other than energy and potash imports which are taxed at 10%, despite Bessent saying those neighbors would face an overall 10% tariff like most other nations outside the White House on April 9. Tariffs on Canada and Mexico were announced earlier this year and they weren't specifically named in the round of reciprocal tariffs announced last week.
The Detroit automakers did not immediately provide a comment on April 9's development. The American Automotive Policy Council, which represents Ford Motor Co., General Motors and Stellantis in Washington, D.C., referred the Free Press to its March 26 statement.
"U.S. automakers are committed to President Trump’s vision of increasing automotive production and jobs in the U.S. and will continue to work with the administration on durable policies that help Americans. In particular, it is critical that tariffs are implemented in a way that avoids raising prices for consumers and that preserves the competitiveness of the integrated North American automotive sector that has been a key success of the President’s USMCA agreement," said Matt Blunt, president of AAPC.
The increased pressure on China is also expected to impact Michigan businesses, including the auto industry, giving the global nature of supply chains.
'Gut punch to Detroit automakers' ‒ with some hope
The Trump administration said the president agreed to lower the reciprocal tariffs to 10% for three months because some 75 countries approached U.S. officials looking to negotiate. Only China, he said, sought to retaliate aggressively.
Markets jumped on the news that the reciprocal tariffs, some of which were as high as 50%, would be paused.
Wedbush Securities Managing Director Dan Ives told the Free Press that while the “auto industry cannot pop the champagne like many other industries” on the pause in tariffs, Wall Street’s gleeful reaction to the news indicates that investors assume negotiations will happen even on the autos 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.”
UAW President Shawn Fain has come out in support of tariffs, saying they will drive more manufacturing back into the country and create jobs. But Ives said the near-term negative effects tariffs would have by increasing automakers’ costs and potentially driving down sales would be so damaging it could mean production pauses and layoffs. Those would be “devastating” results that will move the administration, Ives said.
Meanwhile, Michigan Gov. Gretchen Whitmer was visiting the nation's capital on April 9 and was expected to meet with the president. Earlier in the day, she delivered a speech where she lambasted Trump's broad use of tariffs, but said targeted ones should be used to increase manufacturing jobs and protect industries like the auto industry in Michigan without widely increasing consumer costs and threatening stock market gains.
Contact Todd Spangler: tspangler@freepress.com. Follow him on Twitter@tsspangler.
