Trump eases car tariffs, incentivizes US manufacturing
President Donald Trump will sign an order easing tariffs on cars on Tuesday, announced Commerce Secretary Howard Lutnick. According to the new regulations, cars assembled in the United States and containing less than 15% foreign parts will be exempt from the tax.
As the Commerce Secretary told reporters, the new regulations, introduced less than a month after tariffs on imported cars, aim to encourage car manufacturers to relocate production and the supply chain of automotive parts to the United States. Until now, cars produced in the United States were subject to a tax depending on the extent to which they consisted of foreign components. 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, whose prices will increase due to tariffs. Manufacturers are also to 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 admitted that the decision was made after car companies expressed concerns about the impact of tariffs on their business. According to Lutnick's announcement, the 25% tariffs on car parts will, however, come into effect as planned on May 3rd. Poland is one of the largest European exporters of components and automotive accessories to the United States.
Trump is expected to sign the order during a visit to Michigan, commemorating the 100th day of his second term as President. Trump will speak at a rally in Warren, a suburb of Detroit, the centre of the American automotive industry.
Following the imposition of car tariffs, Stellantis announced that it will temporarily lay off 900 workers at its plants in Warren and other factories across the country.
