Trump will make its 25% tariffs easier for car manufacturers

Washington (AP) – President Donald Trump If an executive order will be signed on Tuesday to relax some of its 25% tariffs for cars and auto parts, said the White House, a significant reversal, since the import taxes that were violated by domestic manufacturers threatened.

Car manufacturers and independent analyzes have shown this The tariffs Could increase prices, reduce sales and make us less competitive worldwide. The press spokesman for the White House, Karoline Leavitt, said at a briefing on Tuesday that Trump would sign the command later a day, but rejected details of the order.

Finance Minister Scott Bessent, who came to Leavitt at the Briefing of the White House, said the goal was to create more domestic jobs to the car manufacturers.

“President Trump has had meetings with both domestic and foreign car producers and he has undertaken to bring car production back to the USA,” said Bessent. “So we would like to give the car manufacturers a way to create this quickly, efficiently and as many jobs as possible.”

The administration offers car manufacturers that end their vehicles a discount of 15% this year and compensate for the costs of tariffs. This discount would be 10% in the second year and gives the car manufacturers some time to move the production of parts outside the country to the United States, an official of the senior trade department department said with reporters for the preview of the executive regulation. The discounts would be available to domestic and foreign companies with car systems in the USA

John Elkann, chairman of the Stellantis, said in a statement that the company appreciates the President's tariff.

“While we are further evaluating the effects of tariff policy on our North American operations, we look forward to our continued cooperation with the US government in order to strengthen a competitive American auto industry and to promote exports,” he said.

Mary Barra, CEO of General Motors, said that the car manufacturer was grateful for Trump's support for the industry, and she found that the company was looking forward to talks with the president and the cooperation with the administration.

“We believe that the President's leadership contributes to the fact that companies such as GM take up competitive conditions and enable us to invest even more in the US economy,” said Barra in an explanation.

Jim Farley, President and CEO of Ford Motor Company, emphasized that his company has more than his colleagues in Germany.

“We will continue to work closely with the administration to support the president's vision for a healthy and growing auto industry in America,” said Farley. “Since the right guidelines are introduced, it will be important for the large vehicle importers to meet Ford's commitment to building in America. If every company that sells vehicles in the USA would compare the American manufacturing ratio of Ford, 4 million other vehicles in America will be gathered every year.”

However, the change in the direction does not help an industry that lives from stability, said Sam Fiorani, analyst at the business forecast company Autforecast Solutions.

“Finding a way to get the auto industry back must be of great importance,” said Fiorani. “The tariffs did not look at this industry as it works and expect it to be able to jump and shift production in no time. It just doesn't work that way.

“A change in production for vehicle production takes at least months and usually years and hundreds of millions, if not billions of dollars,” he added. “And so it's not something you take easily.”

For the first time, the Wall Street Journal reported details of the order and said that it also includes changes in enforcing import taxes to prevent several tariffs from being charged and the tariffs are reduced to parts that are imported to achieve cars in Germany. The changes would also be retrospectively.

The tariffs imposed by Trump were seen by some as An existential threat to the car sector. Arthur Laffer, to whom Trump gave the freedom medal during his first term, said in a private analysis that the tariffs could be without changes Add the cost of a vehicle to 4,711 US dollars.

New vehicles sells at $ 47,462 On average last month, according to Auto-purchase resource Kelley Blue Book. Customs emphasize the automotive supply chain, a complex network that extends over the globe. Not only many auto parts cross North American Limits several times before they are assembled into a finished vehicleCar manufacturers rely on suppliers around the world for thousands of components.

Increased taxes would surely cost new car buyers in a sensitive inflation more, drive them to the used vehicle market and quickly burden the availability of used cars. Customs too Effects on the cost of possession and maintenance A vehicle.

The modifications come as Trumps 100 days back in the white house By going to MichiganA state defined by car production. Trump won the state in the election of last year by promising to increase the factory jobs.

Nevertheless, it remains unclear what effects the wider trump tariffs will have on the US economy and the sale of cars. Most economists say that the tariffs, which could ultimately reach most imports, would slow prices and economic growth, which may want to offer the administration for their previous guidelines despite the relief that the administration.

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St. John contributed from Detroit.