President Donald Trump is set to provide tariff relief for carmakers on Tuesday, just weeks after the onset of auto levies triggered warnings of price increases.
An administration official confirmed that the 25% tariff on finished foreign-made cars and parts will remain — but today’s announcement will prevent tariffs from stacking on top of other tariffs he’s imposed, such as duties on steel and aluminum.
Trump’s 25% tariff on foreign auto parts goes into effect on Saturday and automakers will also be reimbursed for those tariffs up to an amount equal to 3.75% of the value of a U.S.-made car for one year. Reimbursement would fall to 2.5% of the car’s value in a second year, and then completely phased out altogether.
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Speaking at the White House on Tuesday, Treasury Secretary Scott Bessent touted the tariff adjustment as a means of ensuring carmakers bring manufacturing to the U.S.
“President Trump has had meetings with both domestic and foreign auto producers, and he’s committed to bring back auto production to the US. We want to give the automakers a path to do that quickly, efficiently and create as many jobs as possible,” Bessent said.
Trump is expected to deliver remarks about the policy change in Michigan on Tuesday. Details of the plan were first reported in the Wall Street Journal.
U.S. automakers on Tuesday applauded the easing of tariffs.
“Ford welcomes and appreciates these decisions by President Trump, which will help mitigate the impact of tariffs on automakers, suppliers and consumers,” Ford told ABC News in a statement.
GM also voiced praise for the move. “We’re grateful to President Trump for his support of the U.S. automotive industry and the millions of Americans who depend on us. We believe the President’s leadership is helping level the playing field for companies like GM and allowing us to invest even more in the U.S. economy,” the company told ABC News in a statement.
The 25% tariff on imported cars took effect on April 3. It applies to an array of passenger vehicles, including cars, SUVs, minivans, cargo vans and light trucks.
The tariffs will almost certainly raise foreign-made car prices, experts previously told ABC News, since importers typically pass along a share of the tax burden to consumers in the form of extra costs.
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The policy change offers automakers a chance to relocate their manufacturing, Commerce Secretary Howard Lutnick told ABC News in a statement.
“This deal is a major victory for the President’s trade policy by rewarding companies who manufacture domestically, while providing runway to manufacturers who have expressed their commitment to invest in America and expand their domestic manufacturing,” Lutnick said.
The move aims to give automakers an opportunity to move their supply chains for parts back to the U.S.
“President Trump is building an important partnership with both the domestic automakers and our great American workers,” Lutnick also said in the statement.
Trump to ease tariffs faced by US automakers originally appeared on abcnews.go.com
