Trump plans to ease import tariffs to help US auto industry

Auto manufacturing

President Donald Trump will sign an executive order on Tuesday aimed at mitigating the impact of auto import tariffs on US automakers, White House officials said.

The Wall Street Journal reported Monday that the White House is expected to announce a new tax structure for cars that would avoid “stacking” existing import tariffs, such as the 25% additional tariff on imported steel and aluminum.

Under the plan, vehicles and auto parts currently subject to a 25% Section 232 tariff will no longer be subject to additional tariffs that Trump has imposed, including a 25% tariff on goods from Canada and Mexico, as well as a 10% tariff on most other countries.

“This deal is a major victory for the President’s trade policy by rewarding companies who manufacture domestically, while providing a runway to manufacturers who have expressed their commitment to invest in America and expand their domestic manufacturing,” Commerce Secretary Howard Lutnick said in a statement to CNN on Monday.
The executive order is expected to be announced later Tuesday, coinciding with Trump’s visit to Michigan.

Trump’s tariffs on imported vehicles went into effect on April 3, while the tariffs on auto parts will go into effect on Saturday.

Vehicles and components that meet the standards of the United States-Mexico-Canada Agreement (USMCA) will be largely exempt from these import duties. However, industry experts say there is still much confusion about how the tariffs will impact the global supply chain.

General Motors (NYSE: GM) officials said Tuesday that investors cannot continue to place confidence in its previous earnings forecast, as the auto industry seeks to better understand the impact of new tariffs on cars, steel and aluminum.

GM said in January that it expects full-year 2025 net income to be between $11.2 billion and $12.5 billion.

“We’re going to look for more clarity before we get into any forward projections of the tariff exposure, and that’s why we’re going to tell people that you can’t rely on the guidance that we had issued before, because we do believe that [the tariff effect] could be material,” GM Chief Financial Officer Paul Jacobson said on a conference call with analysts Tuesday following first-quarter results.

Ford (NYSE: F) CEO Jim Farley expressed support for President Trump’s decision to ease the impact of tariffs on the U.S. auto industry.

“Ford welcomes and appreciates these decisions by President Trump, which will help mitigate the impact of tariffs on automakers, suppliers and consumers,” Farley said in a statement to the media.

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Source: Phaata.com (According to Freight Waves)

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