automotive

Official, Trump Revises Import Tariffs For The Automotive Sector

US President Donald Trump signed an executive order easing auto tariffs after intense lobbying by automakers, parts suppliers and car dealers. Under the executive order signed aboard Air Force One, imported cars are given separate tariff suspensions on aluminum and steel, in an effort to prevent multiple levies from stacking up against each other. "I have now determined that, to the extent these tariffs apply to the same item, they should not all have a cumulative effect (or 'stack' one upon the other) because the resulting tariffs exceed what is necessary to achieve the intended policy objectives," Trump said in the order, quoted by Bloomberg, Wednesday (4/30/2025). In addition, administration officials said Trump would change the 25% tariff on auto parts that was scheduled to begin on May 3 by allowing automakers that produce and sell finished cars in the US to claim a deduction worth up to 3.75% of the value of American-made vehicles, a senior Commerce Department official said. The deduction would taper off in one year to 2.5% of the value of the car, and then be eliminated the following year, in an effort to encourage domestic production. The reductions will apply to cars manufactured after April 3. Trump softened his stance ahead of a trip to Michigan, where he plans to mark the first 100 days of his second term in office with a speech in Macomb County, a conservative suburb of Detroit that is home to many of the blue-collar jobs the president has said his tariffs will help. 

While Trump’s latest changes will ease the cost burden on automakers, suppliers and dealers, it’s too early to say how much financial relief they will actually bring. The auto industry is still grappling with a 25% tariff on imported vehicles that threatens to significantly raise the industry’s costs and strain supply chains. The sector has also been waiting for details from the administration on how to calculate the cost of the tariffs on auto parts, which has created confusion and forced some factories to halt production as automakers play out scenarios and argue with suppliers over who will shoulder the bulk of the new costs. That instability was on display when General Motors Co. withdrew its earnings guidance for the year and postponed a call with investors to give executives time to digest the new rules and their impact on their financial outlook. Automakers have so far kept prices steady as they try to allay concerns that Trump's 25% tariffs on imported cars will raise costs by thousands of dollars. Fears that the levies could raise sticker prices fueled a surge in sales in the first quarter. 

Tag: Air Force One Automotive Sector Donald Trump Trump Revises Import Tariffs