US automakers are set for a reprieve after the White House claimed it would ease some of the import duties on foreign-made vehicle parts.
Secretary of commerce Howard Lutnick said the decision had been made by President Trump to offer car companies “a mechanism for securing a partial reimbursement of duties paid” as a consequence of the wide-ranging tariffs he implemented last month.
“President Trump is building an important partnership with both the domestic automakers and our great American workers,” said Mr Lutnick.
It is understood that the ‘reimbursement’ would be based on a vehicle’s production in the US: if 70% of a car’s value is produced in the US, there would be a larger reimbursement than for a car with 50% of its value created domestically.
And while cars made outside the US will still be subject to unchanged tariffs, the new arrangements will include exemptions from other levies, including those on aluminium and steel, due to be officially announced today.
General Motors (GM) had been due to host an analyst call today, but announced this morning this would be postponed.
Following the announcement, GM CEO Mary Barra had been the first yesterday to praise Mr Trump, claiming his “leadership is helping level the playing field for companies like GM”, later joined by her opposite number at Ford, Jim Farley. He reportedly said the changes would “help mitigate the impact of tariffs on automakers, suppliers, and consumers”.
The move also marks the latest softening of Mr Trump’s approach to tariffs, with many sources having said in recent weeks they expected just such an about-turn, believing Mr Trump now understood tariffs to be “the starting point in a negotiation” rather than the end goal.
