Trump to Ease Auto Tariffs After Industry Pushback

US President Donald Trump is preparing to offer a reprieve on auto tariffs after mounting appeals from American carmakers, aiming to soften the impact of levies set to hit foreign auto parts and prevent multiple tariffs from stacking up on imported steel and aluminum used in car manufacturing.

 

The policy shift is expected just days before 25% tariffs on imported auto parts were scheduled to take effect on May 3, 2025. Under the revised plan, automakers producing vehicles in the US will be eligible for partial reimbursement on tariffs based on their domestic output, incentivising greater investment in American manufacturing.

 

Trump’s Tariff Strategy Evolves

This deal is a major victory for the president’s trade policy, highlighting how it rewards domestic manufacturers while giving time to companies committing to increase production within the US.

 

The move comes ahead of Trump’s visit to Michigan, the heart of the US auto industry, to mark the first 100 days of his second term. The White House also confirmed that a formal presidential proclamation on the changes could be signed before his scheduled speech in Macomb County, a blue-collar stronghold.

 

Auto Industry Reacts

Leaders from the auto industry welcomed the decision and praised the move for mitigating the tariff impact on automakers, suppliers, and consumers. They noted it helps level the playing field and supports further investment in the US economy.

 

Industry groups had earlier warned that stacking tariffs on steel, aluminum, and parts would disrupt the tightly integrated North American supply chain, increasing costs and jeopardizing domestic manufacturing goals.

 

The phased tariff relief is intended to encourage supply chain localization over time without shocking the system. Trump had previously indicated understanding of the industry’s concerns, noting that carmakers using parts from countries like Canada and Mexico "need a little time" to transition.

 

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