Trump to ease auto tariffs ahead of 100th day visit to Michigan
President Donald Trump is set to make a significant move in the auto industry by signing a proclamation that will soften auto tariffs. The announcement was made by senior White House officials, who confirmed that the current 25% tariff on imported cars will remain in place, but additional tariffs on steel and aluminum will not be added on top of the auto tariff.
This decision comes on Trump’s 100th day back in the Oval Office, and he plans to celebrate it with a rally in Michigan, near Detroit, the former auto manufacturing capital of the U.S. As part of the proclamation, domestic auto manufacturers who complete the assembly of cars in the U.S. will receive an offset for automobile part tariffs. This offset will be equal to 3.75% of the Manufacturer’s Suggested Retail Price (MSRP) for the next 12 months, and 2.5% for the following year. These calculations were designed to account for the tariff owed when a 25% duty tax is applied to 15% of the value of a U.S.-assembled car.
The 25% tariff on certain auto parts is scheduled to go into effect on May 3. Auto manufacturers will have the option to use offset credits against this tariff on auto parts. The administration clarified that this offset plan is not a rebate but rather a way for manufacturers to bring in 15% foreign parts and incorporate them into their cars without incurring additional costs.
The aim of this plan is to support domestic auto manufacturers in expanding their operations, increasing employment, and building more factories in America. The two-year timeframe provided in the plan is intended to boost the U.S. supply chain for the auto industry. Under this plan, car manufacturers that use 85% U.S. parts or parts made under the 2020 United States-Mexico-Canada trade agreement will not owe any tariffs. However, all other autos and auto parts imported to the U.S. will face a 25% tariff.
This new proclamation is a significant step towards revitalizing the American auto industry and ensuring that domestic manufacturers have the support they need to thrive in the global market. President Trump’s decision to soften auto tariffs demonstrates his commitment to strengthening the U.S. economy and promoting domestic production in key industries.
