Trump’s tariffs on imported vehicles and auto parts means that they are “not stacked” with aluminum and steel tariffs. This means that car manufacturers don’t pay for cars, auto parts, and in addition to the metals used to make them.
Automakers will reimburse the cost of customs duties on some imported parts, and for the first year it will be up to 3.75% of the value of the new vehicle, but this measure will be phased out over two years. It is unclear how the car manufacturer will be refunded.
With the 25% tariffs on automobiles and auto parts still remain the same, the costs of imported cars and auto parts are expected to rise significantly, increasing the costs of car repairs and insurance premiums.
The New York Times first reported details of the administration’s measures to mitigate the impact of car rates.
White House officials said the measure reflects the level of cooperation between management and the automotive industry. Because auto companies are investing in the US, they have acquired runways to move to the new tariff system, similar to those allowed for the semiconductor industry.
“President Trump is building a significant partnership with both the domestic car makers and our great American workers,” Commerce Secretary Howard Luttonick said in a statement. “The contract is a major victory for the President’s trade policy by rewarding companies that manufacture domestically, and at the same time provides a runway for manufacturers who have expressed their commitment to expanding their investment in the US and domestic manufacturing.”
General Motors Chairman and CEO Mary Bala said in a statement that the company is grateful to Trump for the move.
“I believe the president’s leadership will help level the playing field for businesses like GM, allowing them to invest more in the US economy,” she said.
Jim Farley, CEO of Ford Motor Co., said the company “welcomes and appreciates these decisions by President Trump.