Trump plans to ease tariff impact on US carmakers

Donald Trump, as of Tuesday, April 29, 2025, plans to cushion the impact of his tariffs on US carmakers.

This, according to The Guardian, his administration plans to achieve, by easing some duties on foreign vehicle parts, his administration has said.

In a statement provided by the White House, the commerce secretary, Howard Lutnick, said:

“President Trump is building an important partnership with both the domestic automakers and our great American workers.”

Lutnik said this deal was a major victory for the president’s trade policy, by rewarding companies who manufacture domestically.

He noted that the administration was also providing runway to manufacturers who have expressed their commitment to invest in America and expand their domestic manufacturing.

According to the Wall Street Journal, which first reported the development, the move means car companies paying tariffs would not be charged other levies, such as those on steel and aluminium.

Carmakers would be able to secure a partial reimbursement for tariffs on imported auto parts, based on the value of their US car production, under the plans.

Cars made outside the US will still be subject to Trump’s tariffs but will be exempt from other levies.

The plan is expected to be officially confirmed later on Tuesday.

Trump is traveling to Michigan on Tuesday to commemorate his first 100 days in office, a period that the Republican president has used to upend the global economic order.

The move to soften the effects of auto levies is the latest by his administration, supposedly to show some flexibility on tariffs.

These tariffs have reportedly sown turmoil in financial markets, created uncertainty for businesses and sparked fears of a sharp economic slowdown.

Carmakers said on Monday that they were expecting Trump to issue relief from the auto tariffs ahead of his trip to Michigan.

Michigan is home to the “Detroit Three” companies and more than 1,000 big auto suppliers.

The General Motors (GM) chief executive, Mary Barra, and Ford’s boss, Jim Farley, praised the planned changes.

“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 US economy,” Barra said.

Farley said the changes “will help mitigate the impact of tariffs on automakers, suppliers and consumers”.

Last week, a coalition of US car industry groups urged Trump not to impose 25% tariffs on imported parts, warning they would cut vehicle sales and raise prices.

Trump had said earlier he planned to impose tariffs of 25% on car parts no later than 3 May.

In a letter made public by industry groups, they noted that tariffs on auto parts will scramble the global automotive supply chain.

They also pinted out that the tariffs would set off a domino effect that will lead to higher auto prices for consumers.

According to them, the tariffs would also lower sales at dealerships and will make servicing and repairing vehicles both more expensive and less predictable.”

The letter from the groups representing GM, Toyota Motor, Volkswagen, Hyundai and others, was sent to the US trade representative Jamieson Greer, the treasury secretary Scott Bessent and Lutnick.

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