The White House announced on Tuesday that President Donald Trump will sign an order aimed at protecting the auto industry from overlapping tariffs. This move comes as part of an effort to boost domestic production of vehicles in the United States.
Currently, auto manufacturers face a 25% tariff on imported vehicles. Trump’s new order will prevent additional tariffs, such as the 25% tax on steel and aluminum, from being applied to car companies. This change is retroactive, meaning automakers can receive refunds for tariffs they have already paid.
During a press briefing, Treasury Secretary Scott Bessent emphasized the administration’s commitment to revitalizing car manufacturing in the U.S. He stated that the goal is to create jobs and support automakers in returning production to American soil.
The decision follows requests from the auto industry for relief from tariffs that have been accumulating. Recently, six lobbyists from U.S. automotive groups argued against new tariffs on foreign auto parts, which are set to take effect on May 3.
In addition, modifications to the tariff on foreign auto parts will allow manufacturers to be reimbursed for a portion of the value of U.S.-made cars. In the first year, they can get back up to 3.75% of the car’s value, which will decrease to 2.5% in the second year before being phased out.
In return for this tariff relief, car manufacturers have pledged to increase domestic production, a key priority for the Trump administration. Commerce Secretary Howard Lutnick described this partnership as a significant win for the president’s trade policy, rewarding companies already manufacturing in the U.S. and encouraging others to invest in American production.
Ford Motor Company expressed gratitude for the tariff relief, stating it would help lessen the impact on automakers, suppliers, and consumers. Ford CEO Jim Farley noted the importance of policies that support exports and affordable supply chains for domestic growth.
Stellantis Chair John Elkann also welcomed the tariff relief, indicating a desire to work with the U.S. government to enhance the competitiveness of the American auto industry. General Motors CEO Mary Barra shared her appreciation for the productive discussions with the administration.
This initiative marks a pivotal moment for the auto industry, as it seeks to navigate the challenges posed by tariffs while focusing on strengthening domestic manufacturing.