US President Donald Trump appears to be planning to ease the 25% tariffs his government placed on automotive imports to the country in April. According to the BBC, Trump will reduce some import duties on auto parts manufactured abroad when US-based automakers procure these parts to build and repair vehicles manufactured in the US.
“A major victory”
Commerce Secretary Howard Lutnick described the move as “a major victory for the President’s trade policy by rewarding companies who manufacture domestically,” in a statement provided to Reuters.
Earlier this month, multiple US auto industry organisations called on the Trump administration to not impose 25% tariffs on imported car parts. The tariffs on the auto industry wer originally supposed to come into effect on May 3rd.
In a letter to the White House from automakers, including GM, Toyota and Volkswagen, the companies warned that levies on the auto industry would “lead to higher auto prices for consumers, lower sales at dealerships and will make servicing and repairing vehicles both more expensive”.
“President Trump has had meetings with both domestic and foreign auto producers, and he’s committed to bringing back auto production to the US,” Treasury Secretary Scott Bessent told reporters on Tuesday. “So we want to give the automakers a path to do that quickly, efficiently and create as many jobs as possible.”
Automakers respond
In response to this week’s announcement, GM’s chief executive Mary Barra said the US automaker was “grateful to President Trump for his support of the US automotive industry and the millions of Americans who depend on us,” in a statement to the BBC. Ford also spoke positively regarding Trump’s decision, noting that it would “help mitigate the impact of tariffs on automakers, suppliers and consumers”.
In addition to lifting tariffs on goods used to build cars in the US, the Wall Street Journal also recently discovered that, while cars made outside the country will still be subject to automotive tariffs, the US government will not subject them to further levies like those on steel and aluminium products.
The move is the latest in a series of unpredictable twists and turns taken by Trump’s trade strategy. Trump has already backpedalled on the higher tariff rates he imposed as part of his “Liberation Day” announcements earlier this month, when he announced his decision to pause higher tariffs on dozens of trading partners to allow time for negotiations.