Subaru Corp. sport utility vehicles (SUV) bound for shipment sit at a port in Yokohama, Japan, on Monday, Feb. 18, 2019. Japan is sticking to its view that the U.S. wont apply higher tariffs on imports of Japanese cars and auto parts so long as negotiations toward a trade deal continue, according to Tokyos lead negotiator with Washington.
Akio Kon | Bloomberg | Getty Images
The Trump administration plans to delay auto tariffs by up to six months, stopping itself for now from further widening global trade conflicts, four sources told CNBC.
The White House faces a May 18 deadline to decide whether to slap duties on car and auto part imports. By law, the administration has another 180 days to come to a decision as long as it is negotiating with its counterparts. Trump sees the tariffs as a way to gain leverage over trading partners such as the European Union and Japan during trade talks.
President Donald Trump risks sparking fresh global trade clashes if he goes through with car tariffs. The European Union, for example, has already prepared a list of retaliatory duties to implement if Trump targets autos.
The delay comes as the White House tries to strike a potential trade deal with China to end an escalating conflict. The world's two largest economies increased tariffs on one another in recent days, amplifying a fight that has rattled financial markets and threatened to drag on the global economy.
Trump is mulling whether to use a national security justification to slap tariffs as high as 25% on cars. In February, the Commerce Department delivered a report to the president saying that he could justify duties citing a national security threat. He also used the rationale to put tariffs on steel and aluminum imports.
Lawmakers from both major parties have pushed Trump not to move forward with the auto duties. U.S. automakers have also opposed the potential tariffs.
This story is developing. Please check back for updates.
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