UPDATE: United States President Donald Trump’s administration has reduced the impact of its automotive tariffs.
Read the White House proclamation here.
Providing carmakers with credits up to 15% of the value of cars assembled domestically is the Republican president's latest partial reversal of tariff policies. Imported parts could be applied against these costs, giving time for supply chains to return.
The Wall Street Journal were the first to break the news and reported that the tariff modifications, allowing automakers to be reimbursed for tariffs up to an amount equal to 3.75% of the value of a U.S.-made car for one year, would become effective on 3 May.
Commerce Secretary Howard Lutnick told Reuters that Trump is attempting to build “important relationships” with domestic automakers and American workers.
"This deal is a major victory for the President's trade policy by rewarding companies who manufacture domestically, while providing runway to manufacturers who have expressed their commitment to invest in America and expand their domestic manufacturing,” Lutnick said in a statement.
The softening of auto tariffs comes after a coalition of auto groups rallied together to lobby against the Trump administration's 25% tariffs.
If the tariffs remained in place, Morgan Stanley analysts estimated there would be a 10% to 12% price hike on car prices.
These also aren’t the first tariffs Trump has pulled back on, as he already imposed a 90-day pause earlier this month on many of the tariffs he imposed and softened his tone on China.
