The White House confirmed on Tuesday that President Donald Trump will sign an order protecting the auto industry from tariffs “stacking” on top of each other in exchange for continued focus on domestic production.
Auto manufacturers will continue to pay a 25% tariff for imported vehicles, but Trump’s order will prevent any additional tariffs, such as the 25% tax on steel and aluminum, from affecting car companies, CNBC reported. Trump’s order will be retroactive, allowing automakers to receive reimbursements for tariffs they have already paid, according to The Wall Street Journal.
Treasury Secretary Scott Bessent said during a White House press briefing on Tuesday that the president’s move shows a commitment to bringing car manufacturing back to the United States. “We want to give the automakers a path to do that quickly, efficiently, and create as many jobs as possible,” he said.
The change comes after automakers called on the Trump administration to provide some relief from the tariffs that have been stacking up on the car industry. Six lobbyists representing U.S. automotive groups joined forces last week to argue against implementing tariffs on foreign auto parts, a tax that is set to take effect on May 3.
The Wall Street Journal reported on Monday that the 25% tariff on foreign auto parts will also be modified, allowing car manufacturers to be reimbursed up to 3.75% of the value of the U.S.-made car in the first year. The reimbursement would drop to 2.5% of the car’s value in the second year and then be phased out.
In exchange for the tariff relief, car manufacturers reportedly committed to furthering domestic production, a key point for the Trump administration.
“President Trump is building an important partnership with both the domestic automakers and our great American workers,” said Commerce Secretary Howard Lutnick. “This deal will be a major victory for the president’s trade policy by rewarding companies who are already manufacturing domestically, while providing a runway to manufacturers who have expressed their commitment in investing in America and expanding domestic manufacturing.”
The Ford Motor Company thanked the president for the tariff relief, saying in a statement, “Ford welcomes and appreciates these decisions by President Trump, which will help mitigate the impact of tariffs on automakers, suppliers and consumers.”
“We will continue to work closely with the administration in support of the president’s vision for a healthy and growing auto industry in America,” Ford CEO Jim Farley added. “Ford sees policies that encourage exports and ensure affordable supply chains to promote more domestic growth as essential.”
Stellantis Chair John Elkann added, “Stellantis appreciates the tariff relief measures decided by President Trump. While we further assess the impact of the tariff policies on our North American operations, we look forward to our continued collaboration with the U.S. Administration to strengthen a competitive American auto industry and stimulate exports.”
General Motors CEO Mary Barra also expressed her gratitude for the “productive conversations with the President and his Administration.”
