President Donald Trump has mandated that automakers, including Tesla Inc. TSLA , manufacture entire vehicles and all components within the U.S. This announcement was made during a press conference on Friday, coinciding with Elon Musk’s departure as a senior adviser at the White House.
What Happened: President Trump addressed concerns regarding tariffs impacting companies like Tesla that import auto parts.
He assured that Musk would eventually produce entire cars domestically, noting, “Pretty much he does.”
Trump emphasized that all manufacturers must build their parts in the U.S., expressing dissatisfaction with parts being made in countries like Canada, Mexico, and Europe.
“Nobody knew what the hell was happening,” he stated, declaring that within the next year, automakers must ensure complete production occurs in America.
Earlier this year, the Trump administration imposed a 25% tariff on imported vehicles and auto parts, which the auto industry claims will disrupt supply chains and increase car prices. While Tesla manufactures its electric vehicles in the U.S., many key components are sourced from abroad.
Why It Matters: The automotive industry has been grappling with the implications of tariffs since President Trump hinted at increasing the 25% tariff on Canadian automobile imports in April, suggesting that the U.S. auto industry would benefit from reduced Canadian involvement.
In a statement from the Oval Office, Trump remarked, “We don’t want your cars, with all due respect.”
In May, General Motors Co. GM CEO Mary Barra expressed support for Trump’s tariffs, citing them as a tool to level the playing field against foreign government subsidies and tax policies.
The Trump administration eased some auto tariffs, allowing for reimbursements for domestic car producers importing parts, though these reimbursements will phase out over time.
This policy shift underscores the administration’s commitment to strengthening the U.S. automotive sector by encouraging domestic production, a move that could have significant implications for automakers and their supply chains.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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