The White House yesterday confirmed plans for the Trump administration to soften the impact of automotive tariffs, as the car industry grapples with regulatory uncertainty and additional costs due to the levies.
Current tariffs of 25 per cent on imported vehicles into the US will continue, but the new measures will prevent other adjacent levies, such as an additional 25pc tariffs on steel and aluminium, from “stacking” on top of the others, a White House official told NBC News.
Additional 25pc tariffs on car parts that are expected by May 3 are still scheduled to take effect, but there will be an ability for some reimbursements, the official said.
The reimbursements on car parts tariffs include up to an amount equal to 3.75pc of the value of a US-made car for one year, followed by 2.5pc of the car’s value in a second year, and then would be phased out altogether, according to The Wall Street Journal, which first reported the expected changes.
White House Press secretary Karoline Leavitt told media yesterday that President Donald Trump would sign an executive order later in the day regarding the car tariffs, but she declined to disclose any specific changes.
The expected moves follow carmakers and car policy groups lobbying the Trump administration for some relief on tariffs, which have been stacking up on the automotive industry.
Last week, six of the top policy groups representing the US automotive industry, including the Alliance for Automotive Innovation that represents most major carmakers, uncharacteristically joined forces to lobby the Trump administration against implementing the upcoming tariffs on car parts.
“President Trump has indicated an openness to reconsidering the administration’s 25pc tariffs on imported automotive parts – similar to the tariff relief recently approved for consumer electronics and semiconductors. That would be a positive development and welcome relief,” the groups said in a letter to Trump officials.
The groups – representing franchised dealers, suppliers and nearly all major carmakers – said the upcoming levies could jeopardise US automotive production and noted many car suppliers are already “in distress” and wouldn’t be able to afford the additional cost increases, leading to broader industry problems.
Ahead of the company reporting its first-quarter results yesterday, General Motors CFO Paul Jacobson told reporters that “future impacts of tariffs could be significant.”
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