Trump set to grant tariff reprieve for auto sector

US President Donald Trump is set to sign an executive order providing a reprieve for automakers from some of his administration’s steep 25% tariffs on imported vehicles and auto parts. 

This order comes following significant pressure from the automotive industry, which warned that the tariffs could raise vehicle prices, reduce sales, and threaten jobs in the sector.

As first reported by The Wall Street Journal, the order will ensure that automakers are not subject to multiple overlapping tariffs.

For example, vehicles and parts already facing the 25% auto tariff will not be hit with additional tariffs on steel and aluminum, which are also used in car manufacturing.

Additionally, automakers will be eligible for partial reimbursements on tariffs paid for imported auto parts used in US-made vehicles.

The reimbursement will be up to 3.75% of the value of a US-manufactured car for the first year, then 2.5% in the second year, before being phased out completely.

The changes are expected to be retroactive, allowing companies to receive refunds for certain tariffs already paid.

White House press secretary Karoline  Leavitt confirmed that Trump would sign an executive order on Tuesday regarding auto tariffs, but did not provide any details on the changes. 

Commerce Secretary Howard Lutnick told Reuters: "This deal is a major victory for the President's trade policy by rewarding companies who manufacture domestically.”

Automakers weigh in

The news was welcomed by major automakers, including General Motors Company (NYSE:GM) and Ford Motor Company (NYSE:F).

"We're grateful to President Trump for his support of the US automotive industry and the millions of Americans who depend on us,” General Motors CEO Mary Barra told BBC.  

Ford said the order would "help mitigate the impact of tariffs on automakers, suppliers and consumers."

"We will continue to work closely with the administration in support of the president's vision for a healthy and growing auto industry in America," it said in a statement.

Trump is set to appear at a rally in Michigan to mark the first 100 days of his second term as President, where it is expected he will unveil his auto tariff plan.