US President Donald Trump signed an executive order Tuesday providing exemptions to tariffs on foreign car and parts imports. The move aims to “de-stack” tariffs, allowing automakers to pay only the highest applicable tariff.
The exemptions prevent tariffs on foreign-made cars from stacking on top of other duties. Automakers will now choose between steel or auto tariffs, whichever is higher, with any rebates paid from tariff revenue. This means no additional cost to the government.
Tariffs on auto parts, set for May 3, will also be reimbursed up to 3.75% of a US-made car’s value for one year and then 2.5% the following year before phasing out. The reimbursement aims to offset the automaker’s tariff bill for importing those parts.
The changes are expected to help automakers expand their plants, hire more US workers, and get more “runway” to onshore their supply chain. Automakers like Ford and Stellantis welcomed the move, citing its potential to mitigate the impact of tariffs on exports and domestic growth. However, Barclays analyst Dan Levy sees limited benefits from the exemptions, expecting them to be somewhat offset by greater tariff costs.
Source: https://finance.yahoo.com/news/trump-gives-automakers-some-tariff-relief-200943678.html