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Trump set to ease tariff impact on US car makers

April 29, 2025

President Trump is preparing to ease the impact of his tariffs on US automakers by reducing import duties on foreign parts used in domestically manufactured vehicles while maintaining tariffs on fully imported cars. Commerce Secretary Howard Lutnick called this a "major victory" for the administration's trade policy that rewards domestic manufacturing. The announcement comes as Trump plans to hold a rally in Michigan, home to Ford, General Motors, and Stellantis (the Detroit Three), where executives from these companies have expressed gratitude for the decision.

Who is affected

  • US automakers (Ford, General Motors, and Stellantis - the "Detroit Three")
  • Network of more than 1,000 major automotive industry suppliers
  • US car consumers facing potential price increases
  • Vehicle importers who will still face automotive tariffs
  • Auto dealerships concerned about lower sales

What action is being taken

  • Trump is planning to reduce import duties on foreign parts used in US-manufactured vehicles
  • The administration is maintaining automotive tariffs on cars made outside the US
  • The government is offering flexibility on tariff policy for the auto industry
  • Car manufacturers are working with the administration to mitigate tariff impacts
  • Industry groups are lobbying against the 25% tariffs on imported car parts

Why it matters

  • The tariff relief represents what the administration calls a "major victory" for Trump's trade policy
  • The automotive industry is a significant employer in states like Michigan with its Detroit Three manufacturers and supply network
  • Tariffs have caused turmoil in global financial markets and created business uncertainties
  • Without relief, higher parts costs could lead to increased vehicle prices, lower dealership sales, and more expensive repairs and servicing
  • The policy aims to reward and encourage domestic manufacturing while maintaining pressure on imports

What's next

  • No explicit next steps stated in the article

Read full article from source: BBC