It’s been less than a month since President Trump implemented a blanket 25-percent tariff on foreign-made cars and car parts. Now, in an effort to improve relations with automakers and the public on his 100th day in office, the administration plans to offer partial relief from those tariffs.
The changes would eliminate the “stacking” of tariffs on cars and parts that cross the border more than once, according to the Wall Street Journal. Automakers will also be reimbursed for car parts, like steel and aluminum, that cross the border.
Photo by: Mercedes-Benz
Mercedes-Benz Alabama Factory
The 25-percent tariffs on foreign-built auto parts, which was set to go into effect on May 3, will be partially reimbursed, according to the administration. Automakers have to apply for the reimbursements, though, which allows for a refund of up to 3.75 percent of the car’s value for the first year. In the second year, that figure drops to 2.5 percent. After that, the reimbursement will be phased out.
The change is retroactive, according to the WSJ. That means any tariffs already paid by automakers can be partially refunded.
“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,” US Commerce Secretary Howard Lutnick told CNN.
Car prices from Trump’s tariffs were expected to rise by $3,600 on average, according to analysts. While this move doesn’t come close to eliminating that price hike, nor does it quell the uncertainty facing the industry’s future in dealing with this administration, American automakers are understandably relieved. Here’s what Ford CEO Jim Farley had to say:
‘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 sees policies that encourage exports and ensure affordable supply chains to promote more domestic growth as essential. As the right policies are put in place, it will be important for the major vehicle importers to match Ford’s commitment to building in America.
If every company that sells vehicles in the U.S. matched Ford’s American manufacturing ratio, 4 million more vehicles would be assembled in America each year. The U.S. would see a windfall of new assembly and supplier factories and hundreds of thousands of new jobs.’
Mary Barra, CEO of General Motors, echoed a similar sentiment, saying GM was “grateful to President Trump for his support of the U.S. automotive industry and the millions of Americans who depend on us.
“We believe the President’s leadership is helping level the playing field for companies like GM and allowing us to invest even more in the U.S. economy,” Barra said in a statement published by NBC News. “We appreciate the productive conversations with the President and his Administration and look forward to continuing to work together.”
“Stellantis appreciates the tariff relief measures decided by President Trump,” said Stellantis chairperson John Elkann. “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.”
