Trump to modify auto tariffs to dampen impact
U.S. President Donald Trump is expected to soften the blow of his automotive tariffs by preventing duties from stacking on top of other tariffs he has imposed, while also scaling back some duties on foreign parts, the Wall Street Journal reported on Monday.
The move will mean that U.S. automakers paying Trump’s automotive tariffs will not be subject to other duties, such as those on steel and aluminum, the WSJ report said, citing people familiar with the matter.
The move will also be retroactive, meaning that automakers could be reimbursed for tariffs they have already paid, the WSJ report said.
Trump also plans to modify its tariffs on auto part imports, which will allow automakers to be reimbursed for up to an amount equal to 3.75% of the value of a U.S.-made car for one year, the WSJ report said.
Trump’s 25% tariffs on finished imported cars took effect in early April, while a 25% duty on foreign auto parts is set to take effect from May 3.
Trump is expected to announce the tariff relief before a trip to Michigan for a rally outside Detroit on Tuesday evening, the WSJ said.
The potential tariff relief is likely aimed at allowing automakers more time to shift supply chains to the U.S., in line with Trump’s tariffs.
Trump’s auto tariffs had ramped up concerns over heightened car costs in the U.S., given that even cars manufactured domestically still import a wide variety of components.
Electric vehicle manufacturer Tesla (NASDAQ:TSLA) had last week withdrawn in 2025 guidance amid uncertainty over Trump’s tariffs. CEO Elon Musk also flagged a “significant” impact from the tariffs.
Source: Investing.com
