Trump sets new car tariff rules to boost American production
President Donald Trump is set to sign an order easing tariffs on cars on Tuesday, Commerce Secretary Howard Lutnick has announced. According to the new regulations, cars assembled in the USA and containing less than 15% foreign parts will be exempt from the tax.
As Secretary Lutnick explained to reporters, the new regulations, introduced less than a month after tariffs on imported cars were implemented, aim to encourage car manufacturers to relocate production and the supply chain of automotive parts to the USA. Previously, cars produced in the USA were subject to a tax that depended on the extent of their foreign components. Now, they are eligible for a tariff exemption if composed 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 are likely to increase due to tariffs. Manufacturers will also be exempt from paying other tariffs, including those on steel and aluminium, 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, take effect as planned on May 3. 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 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.
