The White House said there will be a mechanism for U.S. parties to apply for exclusion of specific products based on demand that is unmet by domestic production or on specific national security considerations. The Department of Commerce, in cooperation with other agencies, will handle that process.
Auto industry reacts
The auto industry once again warned the tariffs may harm U.S. economic growth, jobs and wallets.
"A tariff is a tax that will result in higher prices that consumers will ultimately bear. Exemptions will not address the fundamental problems tariffs will create for U.S. car and truck manufacturing," said John Bozzella, president of the Association of Global Automakers, which represents international brands in the U.S. "Increased costs will make our industry less competitive and harm American workers, consumers, and our economy."
Charlie Chesbrough, senior economist for Cox Automotive, said Thursday the tariff plan appears to lack a clear, long-term direction for trade strategy and poses "a big problem for the automotive industry."
With steel and aluminum tariffs, Chesbrough said "costs will increase throughout the supply chain, driven by higher raw material prices. With demand at high levels already, it’s likely suppliers will pass their higher costs up the chain, and eventually to car buyers."
He warned suppliers may have to absorb the higher input prices by cutting their own costs and warned, generally, that "neither outcome is good for the industry."
General Motors, which purchases over 90 percent of the steel used for U.S. production from U.S. suppliers, said Thursday it was encouraged by the temporary exemption for Canada and Mexico.
"In the near term, there will be little impact to us from the tariff itself," the company said. "We will be impacted by any general U.S.- sourced steel price increases, but we do not expect a material impact given the majority of our contracts are longer term."
GM said it also expected to minimize any long-term negative impact as a result of the tariffs.
"We have the ability to adjust and adapt to a variety of market changes around the world and that will be our approach on this issue as well," the company added.
Ford last week also predicted that the tariffs "could result in an increase in domestic commodity prices — harming the competitiveness of American manufacturers."
Ford has said it also uses mostly American-made steel for vehicles produced in the United States.
The American International Automobile Dealers Association, which was formed to promote free trade, said last week light-vehicle prices could go up "substantially." The group also warned that retaliatory tariffs from other countries could drive up the price of other U.S. goods, as well.
Hyundai Motor Co. last week said it may revisit how many vehicles it builds in the U.S., joining the world’s largest automakers in speaking out against Trump’s crackdown on steel and aluminum imports.
Honda said Thursday it extensively sources steel and aluminum from U.S. suppliers.
"However, history has shown that tariffs imposed on imported steel could raise prices on both domestic and imported materials, thus causing a financial burden on our customers," the company said.
Threats of reprisals
Other nations have threatened reprisals, and tensions are escalating. On Thursday, China’s foreign minister, Wang Yi, vowed a “justified and necessary response” to any efforts to incite a trade war. It was the Chinese government’s most forcible response yet to the new tariffs.
Wang, who spoke on the sidelines of the National People’s Congress in Beijing, urged the U.S. to work with China on a mutually beneficial solution.
“A trade war has never been the right way to solve the problem, especially under globalization,” Wang said. Such a conflict “will only harm everyone and China will surely make a justified and necessary response.”
Trump also said his administration is also considering imposing reciprocal, or “mirror,” tariffs on countries at the same level they impose on U.S. products.
Bloomberg contributed to this report.