President Trump provides automakers some relief from 25% tariffs
WASHINGTON – President Donald Trump is providing some relief to automakers reeling from his steep 25% tariffs imposed on foreign cars and auto parts.
Trump, under a proclamation he signed April 29, is offering auto companies credits for a portion of the tariffs on auto parts that they import to build vehicles in the U.S. The rebates are equal to 15% of the value of a company's vehicles assembled in the U.S.
In addition, the action prevents the "stacking" of tariffs on the auto industry, meaning car companies paying auto tariffs won't also have to pay other tariffs that Trump imposed on aluminum, steel and other imports.
“We just wanted to help them during this little transition, short-term,” Trump told reporters. “If they can't get parts, we didn't want to penalize them."
Trump signed an amendment to his auto tariffs aboard Air Force One on his way to Michigan, the hotbed of U.S. auto manufacturing, where he's delivering a rally Tuesday night marking the 100th day of his second term.
The "Big three" U.S. automakers ‒ Ford, General Motors and Stellantis ‒ had pushed for relief after raising concerns about the impact Trump's aggressive tariffs could have on the auto industry.
A senior administration official who discussed the measures with reporters argued that the rebates will help American automakers move their supply chains entirely to the U.S. The 15% rebates will be available for one year. It will then lower to 10%. All other auto imports will be subject to the 25% auto tariffs.
The official said the plan would mean that about 3.75% of the sticker price would be duty-free on domestically manufactured vehicles the first year, and about 2.5% the subsequent year.
Trump has argued that tariffs are needed on auto imports to help reinvigorate the domestic production of vehicles.
His move to offer relief stops short of total exemptions from the auto tariffs, which Trump said earlier this month he was considering after temporarily exempting smartphones, computers and other electronics from his universal tariffs.
Treasury Secretary Scott Bessent told reporters that Trump has met with both domestic and foreign auto companies.
"He's committed to bringing back auto production to the U.S.," Bessent said. "So we want to give the automakers a path to do that quickly, efficiently and create as many jobs as possible."
Contributing: Reuters.
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