Trump Gives Automakers A Break With New Tariff Plan

The Trump administration has clarified how the new tariffs on imported automobiles and parts will work after hearing concerns from automakers.

The 25% tariff on imported vehicles stands, but it will not be stacked on top of other tariffs. The 25% levy also applies to imported parts, but those produced under the auspices of the United States-Mexico-Canada Agreement (USMCA) are exempt.

Automakers will also be able to offset the tariffs by up to 3.75% of the manufacturer’s suggested retail price of a vehicle in the first year and 2.5% in the second year to give them time to bring parts production to the U.S, a process that can take a few years, depending on the component.

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We believe the president’s leadership is helping level the playing field for companies like GM and allowing us to invest even more in the U.S. economy,” GM CEO Mary Barra said in a released statement.

Ford CEO Jim Farley echoed Barra’s sentiment saying that “Ford welcomes and appreciates these decisions by President Trump, which will help mitigate the impact of tariffs on automakers, suppliers and consumers.”

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 John Elkann — CEO of Chrysler, Dodge, Jeep and Ram’s parent company Stellantis — added that his company “appreciates the tariff relief measures decided by President Trump. While we further assess the impact of the tariff policies on our North American operations, we look forward to our continued collaboration with the U.S. Administration to strengthen a competitive American auto industry and stimulate exports.”

Trump signed the executive order making the changes while on Air Force One on the way to a rally in Warren, Mich., to celebrate his first 100 days in office.