The administration of US President Donald Trump will today ease the impact of its tariffs on automotive parts by compensating manufacturers for some tariffs imposed on foreign components in cars manufactured in the US. At the same time, it wants to prevent additional import duties from being added to tariffs on car imports from abroad. This was reported by The Wall Street Journal (WSJ), citing informed sources. The US has been collecting a 25 percent tariff on car imports since April 3, and tariffs on parts imports will also come into effect on May 3.
Compensation for tariffs
In the case of foreign parts in cars manufactured in the United States, the administration will allow manufacturers to obtain compensation for these tariffs up to 3.75 percent of the value of the car manufactured in the US per year. In the second year, the compensation would be reduced to 2.5 percent of the car’s value and then gradually phased out completely.
According to the WSJ, Trump is expected to make these decisions before traveling to Michigan, where he will attend a rally near Detroit this evening to mark 100 days in office.
Commerce Secretary Howard Lutnick confirmed that the White House had reached an agreement with automakers, without providing further details. “This agreement will be a significant victory for the president’s trade policy, as it rewards companies that already manufacture domestically while providing a jump start to manufacturers that have expressed their commitment to invest in America and expand domestic production,” he said.
Market disruption
The shift comes after General Motors, Toyota, Volkswagen, Hyundai and others approached the White House in a letter addressed to Trade Representative Jamieson Grier, Treasury Secretary Scott Bessent and Commerce Secretary Lutnick, Reuters reported.
“Most auto suppliers are not financially prepared for a sudden market disruption caused by tariffs. Many are already in distress and will face production stoppages, layoffs, and bankruptcy,” the letter said, adding that “the failure of one supplier is enough to shut down an auto manufacturer’s production line.”
Source: ČTK
