Trump to ease car tariffs: Boost for US manufacturing
President Donald Trump will sign an order on Tuesday to ease tariffs on cars, as announced by Commerce Secretary Howard Lutnick. Under the new regulations, cars assembled in the USA with less than 15% foreign parts will be exempt from the tax.
As Secretary Lutnick told reporters, the new regulations, introduced less than a month after tariffs on imported cars, are designed to encourage car manufacturers to relocate production and the supply chain of automotive parts to the USA. Until now, cars produced in the USA were subject to a tax based on the percentage of foreign components they contained. Now, they are eligible for a tariff exemption if they consist of at least 85% American parts.
Additionally, Lutnick announced that car manufacturers will also receive a 15% rebate on the costs of imported parts, which will see price increases due to tariffs. Manufacturers will also be exempt from paying other tariffs, including those on steel and aluminum, as well as a 10% tariff on most other goods.
What about American tariffs on car imports?
Lutnick conceded that the decision was made in response to car companies expressing concerns about the impact of tariffs on their operations. However, according to Lutnick's announcement, the 25% tariffs on car parts will go into effect as planned on May 3rd. Poland is one of the largest European exporters of components and automotive accessories to the USA.
Trump is expected to sign the order during a visit to Michigan, which will also commemorate the 100th day of his second term as President. He will speak at a rally in Warren, a suburb of Detroit and the heart of the American automotive industry.
Following the imposition of car tariffs, Stellantis announced it will temporarily lay off 900 workers at its plants in Warren and other factories across the country.
