



President Donald Trump signed a pair of directives easing the impact of his tariffs on the automotive industry, yielding to weeks of intense lobbying from automakers, parts suppliers and dealers who warned excessive levies could push up car prices, triggering plant shutdowns and job losses.
Under the first executive order, signed aboard Air Force One, imported automobiles were given a reprieve from separate tariffs on aluminum and steel, an effort to prevent multiple levies from piling on top of each other.
Trump’s tariffs that threatened the auto industry “should not all have a cumulative effect, “he said in the order, “because the rate of duty resulting from such stacking exceeds what is necessary to achieve the intended policy goal.”
A separate proclamation changed the 25% tariff on imported auto parts that takes effect on May 3. Under that measure, carmakers who produce and sell completed automobiles in the U.S. can claim an offset worth up to 3.75% of the value of American-made vehicles.
The offset will reduce in one year to as much as 2.5% of the value of those cars and then be eliminated the following year, a bid to motivate domestic manufacturing. The offset will be available for cars that were produced after April 3.
The moves represent a partial — and for the components measure, temporary — retreat from the most damaging scenario of imported finished vehicles and parts potentially facing several layers of steep tariffs. Trump has argued the levies are necessary to boost domestic auto production and employment. Carmakers have warned imposing steep tariffs over the long term would work against that goal.
Automakers continue to have questions even after Trump’s relief measures.
“This is the biggest challenge: the uncertainty. We’ve got a lot of policy in flux,” John Bozzella, president of the Alliance for Automotive Innovation, said in a Bloomberg TV interview. “We still don’t know the extent to which we’re going to see parts tariffs, we don’t know how long these policies will be in place and how bilateral negotiations will take place between the U.S. and its trading partners.”
The alliance represents most major automakers, including General Motors Co., Toyota Motor Corp. and Volkswagen AG.
Trump’s latest tweaks will lighten the cost burden on car manufacturers and their suppliers, said Mitch Zajac, an automotive and supply chain attorney with Butzel Long in Detroit. Concessions extend to both foreign-made vehicles and domestic manufacturers importing car parts from abroad, he said. Still, the industry still must contend with a 25% duty on imported vehicles that threatens to significantly raise industry costs and pressure supply chains.
“There is relief here,” Zajac said.