US President Donald Trump signed an executive order and proclamation to ease auto tariffs, marking a sudden shift in the country’s rapidly changing tariff policy. The move aims to help domestic car producers by reimbursing them for importing parts subject to 25% tariffs.
The new actions will provide financial support to US car manufacturers, allowing them to offset the costs of complying with higher tariffs on imported parts. The maximum reimbursement will be 3.75% of the value of domestically produced cars, decreasing to 2.5% in the second year and eventually phased out.
Trump’s move is seen as a temporary break for the auto industry, giving manufacturers more time to re-shore their manufacturing capabilities. However, he emphasized that the executive order only provides relief until the industry takes action to address its production and hiring needs.
Industry leaders, including General Motors CEO Mary Barra, have welcomed Trump’s decision, citing concerns about the impact of tariffs on their businesses and consumers. The auto industry has been lobbying for relief from the levies, arguing they will harm Americans’ finances and disrupt supply chains.
The changes also shield auto manufacturers from facing multiple tariffs on the same imported parts, reducing their overall costs. Cars containing a high percentage of domestically produced parts will be exempt from tariffs.
Despite the relief, some automakers have reassessed their profit guidance due to the evolving tariff landscape. Shares in General Motors and Ford fell on Tuesday, while other automakers, including Toyota and Honda, saw their stocks rise.
The move is part of a broader effort by Trump to support US industries and promote domestic manufacturing.
Source: https://edition.cnn.com/2025/04/28/business/us-auto-tariffs-easing-deal-intl-hnk/index.html