Donald Trump’s tariffs on China have sent automakers scrambling to keep production lines moving—and their main solution is the exact opposite of what the U.S. president intended.
When Trump announced his sweeping “reciprocal” tariffs on almost every country (and a few uninhabited islands) in April, he promised that “jobs in factories will come roaring back into our country.” Apparently, part of his goal was to make it so expensive to import certain products that companies would simply start manufacturing them in the U.S.
But so far, the opposite is coming true. Four major automakers are rushing to find a way to keep procuring rare-earth magnets, a key component of car motors, which are primarily made in China. Without the magnets, the companies fear car production could shut down in a matter of weeks.
Several carmakers, both traditional and electric, are considering moving part of the manufacturing process to China, The Wall Street Journal reported Wednesday.
This could include building electric motors in Chinese factories or shipping American-made motors to China to have the magnets installed, according to the Journal. Trump’s restrictions only cover the Chinese-made magnets, not finished parts such as a fully built motor.
“While efforts are under way to bolster supply chains and suppliers of these elements outside of China, this will take additional time and will not alleviate the immediate shortage of elements vital for automotive components used to produce vehicles here at home,” the heads of the Alliance for Automotive Innovation and MEMA, the Vehicle Suppliers Association, warned in a letter.
China had agreed to reduce export controls on rare-earth magnets as part of a 90-day tariff pause with the United States. Trump has since accused China of dragging its feet on license approvals for magnets, while broader trade talks between the two nations appear to have come to a total standstill.
Trump complained about the state of trade talks at 2:17 a.m. Wednesday. “I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!” he wrote on Truth Social.
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