President Donald Trump signed an executive order easing the impact of his auto tariffs, yielding to weeks of intense lobbying from automakers, parts suppliers and car dealers who warned excessive levies could push up car prices, triggering plant shutdowns and job losses.
Under the executive order, signed aboard Air Force One, imported automobiles were given a reprieve from separate tariffs on aluminum and steel, an effort to prevent multiple levies from piling on top of each other.
“I have now determined that, to the extent these tariffs apply to the same article, these tariffs should not all have a cumulative effect (or “stack” on top of one another) because the rate of duty resulting from such stacking exceeds what is necessary to achieve the intended policy goal,” Trump said in the order.
Additionally, administration officials say Trump will change 25% tariffs on auto parts planned to start on May 3 by allowing carmakers who produce and sell completed automobiles in the US to claim an offset worth up to 3.75% of the value of an American-made vehicle, a senior Commerce Department official said.
The offset will reduce in one year to as much as 2.5% of the car’s value, and then be eliminated the following year, a bid to motivate domestic manufacturing. The offset will be available for cars that were produced after April 3.
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