Trump Eases Auto Tariffs, Auto Makers 'Welcome And Appreciate' The Move

President Donald Trump eased auto tariffs with an executive order and proclamation on Tuesday
While not a permanent rollback, the changes are intended to give U.S. auto companies "a little bit of a break"
Auto companies like Ford and Stellantis say they "welcome and appreciate" the move, which came on Trump's 100th day in office

President Donald Trump signed a series of executive orders and proclamations to ease auto tariffs on April 29.

The new order upholds the 25% tariffs on imported cars, as well as the 25% tariff on auto parts that went into effect on May 3. However, new actions allow for reimbursements for domestic car producers importing car parts. The maximum reimbursement will be 3.75% of the value of domestically produced cars. This will decrease to 2.5% for the second year and be phased out entirely thereafter.

Don't Miss:

Inspired by Uber and Airbnb – Deloitte's fastest-growing software company is transforming 7 billion smartphones into income-generating assets – with $1,000 you can invest at just $0.30/share!
Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — this is your last chance to become an investor for $0.80 per share.

The changes also prevent automakers from facing multiple tariff charges. Instead of paying tariffs on the individual components of the parts, such as steel and aluminum, they will be paying only the single highest tariff on whatever they're importing.

Additionally, cars that are made domestically and have at least 85% of their parts made in compliance with the United States-Mexico-Canada agreement will not face any tariffs.

At a rally in Michigan on April 29, to mark his 100th day in office, Trump said the executive orders will give U.S. auto companies "a little bit of a break," while they work to move manufacturing back to the country. "We gave them a little time before we slaughter them if they don't do this," he said.

Today's Best Finance Deals

"[U.S. auto companies] took in parts from all over the world," Trump continued. "I don't want that. I want them to make their parts here."

Trending: How do billionaires pay less in income tax than you? Tax deferring is their number one strategy.

Treasury Secretary Scott Bessent told a press briefing on April 28 that Trump's decision to ease tariffs had come after conversations with several major auto companies. "President Trump has had meetings with both domestic and foreign auto producers, and he's committed to bringing back auto production to the US. So we want to give the automakers a path to do that quickly, efficiently and create as many jobs as possible," Bessent said.

After Trump first announced tariffs, a group of U.S. and international auto companies wrote a letter to the administration asking for relief and exemptions to the proposed levies. "Tariffs on auto parts will scramble the global automotive supply chain and set off a domino effect that will lead to higher auto prices for consumers, lower sales at dealerships and will make servicing and repairing vehicles both more expensive and less predictable," the letter read.

For their part, those auto companies have been appreciative of the move. Ford F CEO Jim Farley said his company "welcomes and appreciates these decisions by President Trump, which will help mitigate the impact of tariffs on automakers, suppliers and consumers," in a statement from its CEO sent to media outlets. Similarly, Stellantis STLA Chair John Elkann told media outlets, the company "appreciates the tariff relief measures decided by President Trump."

Read Next: