Automakers scramble for options in negotiations with Trump as tariff deadline nears

Behind-the-scenes efforts by Detroit’s automakers to avert President Donald Trump’s vow to levy 25% tariffs on vehicles and parts from Canada and Mexico next month haven’t subsided, according to two sources familiar with the situation.

The latest indications from the president are that the industry should buckle up. He says the levies will be instituted on April 2 alongside reciprocal tariffs on goods from around the world to address trade situations where the United States imports more from countries than it exports. Such actions, experts have warned, could cost the auto industry billions of dollars, jeopardize production and cripple supply chains.

Trump offered the industry some relief, at least temporarily. A Zoom call on March 4 between U.S. Commerce Secretary Howard Lutnick and General Motors Co. CEO Mary Barra, Ford Motor Co. Executive Chairman Bill Ford and CEO Jim Farley, and Stellantis NV Chairman John Elkann prompted a one-month reprieve. The White House granted a delay on 25% tariffs on vehicles and components from Canada and Mexico that are in compliance with the trade agreement the United States has with those two countries that Trump signed into law in 2020.

“I did give General Motors and our Big Three actually a month of relief because they would have a very unfair disadvantage over other carmakers, which I didn’t want, so I did that, and I think it was something I did from the fact that I want to take care of our car companies,” Trump said Sunday on “The Sharyl Attkisson Podcast.” “But if they build the car in the United States, there is no tariff. There is zero tariff. There’s nothing, and if they don’t, they’ll have to pay 25%. It could go up a lot higher than that.”

Automakers, however, haven’t resigned themselves to a new, more expensive normal and are instead studying scenarios that might appease the president. Leverage still includes formal offers to move production to the United States from another country, according to two sources familiar with discussions who requested anonymity because they weren’t permitted to speak publicly on the topic.

Auto executives have publicly discussed preparing “playbooks” in the event the tariffs take effect. With an unclear view on how long these duties could stay in place, though, leaders like Barra have emphasized adapting through less capital-intensive means like shipping vehicles from Canada and Mexico into the United States prior to the deadlines. Moving production lines could take months, if not a year or more, and cost millions, if not billions, of dollars.

All three executives have acknowledged publicly in recent months that tariffs would hurt their businesses, but many companies also fear issuing criticism could result in a backlash from the president.

“In such uncertain times, our business leaders are concerned about being too vocal in the press,” U.S. Sen. Elissa Slotkin, D-Michigan, said Monday in Detroit about companies seeking tariff exemptions. “A lot of it is happening behind closed doors. They don’t want to attract attention. They don’t want to be the next whipping boy on social media.”

Among the few exceptions is Ford’s Farley, who said last month that long-term 25% tariffs on Mexico and Canada would “blow a hole” in the U.S. auto industry. He warned the benefit would be to foreign automakers who import vehicles from places like South Korea tariff-free.

Stellantis’ Elkann, meanwhile, late last month urged the administration to instead focus tariffs on vehicles from places such as Japan, South Korea and Europe that don’t have any domestic content. Autos imported from those countries also could be set to face reciprocal tariffs on April 2.

“The real opportunity set for the administration, in order to really boost jobs in America and manufacturing opportunities and investments, is by closing the loophole that currently allows approximately 4 million vehicles into the country without any U.S. content,” he said during an earnings call.

Elkann added the existing trade agreement between the United States, Canada and Mexico should be “actually respected and valued, and eventually improved.”

Shortly after Trump took office Jan. 20, Stellantis announced investments at key U.S. plants, including the reopening of its Belvidere Assembly Plant in Illinois. That announcement came not long after a meeting between Elkann and Trump, where the executive promised to strengthen the automaker’s U.S. manufacturing footprint and provide “stability” for its American workforce, according to an email sent to employees. The U.S. investments announcement was something of a reversal from the automaker’s approach in 2024, when it had pulled back on some of its domestic production plans and conducted rounds of layoffs.

“We share the President’s objective to build more American cars and create lasting American jobs,” Stellantis added in a statement earlier this month after automakers won the month-long tariff reprieve on cars coming from Canada and Mexico.

The American Automobile Labeling Act requires automakers to report U.S. and Canadian content of vehicles sold in the United States. For 2025 models, there are 176 models listed with 0% U.S. and Canadian content. These include vehicles from Bentley, BMW, Mini, Toyota, Hyundai, Jaguar, Land Rover, Kia, Mazda, Mercedes-Benz, Mitsubishi, Infiniti, Nissan, Porsche, Subaru and Lexus. Stellantis vehicles, notably, weren’t listed in the 2025 report from the National Highway Traffic Safety Administration.

Barra, for her part, said Trump’s tariff plans are a “part of the negotiation, to accomplish goals,” suggesting she didn’t necessarily believe they would be put in place. She said GM’s goal was to “help people understand, before (tariffs are) in place, what the implications are, so they can understand and make the decisions that are best for the country.”

More recently, Reuters reported that Barra met with Trump to talk about the automaker’s investment plans — and Trump later told reporters that the automaker wants to “invest $60 billion.”

Tesla Inc. CEO Elon Musk also has pledged to double the electric vehicle maker’s U.S. production during Trump’s term. Musk has become a part of Trump’s inner circle and is helming the cost-cutting efforts known under the Department of Government Efficiency, or DOGE.

Some suppliers also have warned how destructive tariffs could be, saying they can’t absorb a tariff as large as 25% and will be forced to pass on the costs to their customers. That likely will result in new vehicle prices — which already are transacting near $50,000 on average — increasing.

Glenn Stevens, executive director of the Detroit Regional Chamber’s MichAuto association, speaks regularly to auto companies, trade groups and lawmakers. He said there has been “no shortage” of communication with the Trump administration, which he acknowledged is listening.

“There’s a real fear that there’s going to be failures in the supply chain,” Stevens said. “This is a very precarious thing you’re doing not just with an industry but an economy.”

Trump has said he set April 2 as the deadline for his reciprocal tariffs to go into effect because he’s “a little superstitious” about April 1 — April Fool’s Day.

Some auto industry executives have pinned their hopes on April 2 coming and Trump agreeing to have U.S. trade representatives renegotiate the USMCA instead of imposing tariffs.

“That could very well be where we’re heading,” Stevens said. “Let’s hope that’s where we’re heading because … everybody’s delaying decision-making. Products on hold. (Vehicle) launches are pulled back. And this is on top of the EV pullback that we already had.”

Automakers are looking for a consistent policy, which is not what they have witnessed in recent weeks as tariffs on Canada and Mexico were switched on and off, and as Trump continues to threaten higher tariffs on others, said Terence Lau, dean of Syracuse University’s College of Law and a former trade expert for Ford.

“It’s impossible to keep up with day-to-day or week-to-week changes,” he said. “The auto industry makes plans months in advance, if not years. So it’s just impossible to plan.”

But he said the Detroit Three are sure to keep up their behind-the-scenes lobbying efforts in coming weeks, and will continue to seek a “partnership with the administration” where both sides can come away with something from the tariffs, and tariff threats.

“I mean, there is a shared goal here, which is American competitiveness and profitability of American car companies,” Lau said. “That is a shared goal. Well, how do you reach that without creating what Farley calls a giant hole in the U.S. auto industry?”