Trump eases auto tariffs burden as Lutnick touts first foreign trade deal

WASHINGTON/DETROIT: US President Donald Trump signed a pair of orders to soften the blow of his auto tariffs on Tuesday with a mix of credits and relief from other levies on materials, and his trade team touted its first deal with a foreign trading partner.
The developments helped eased some investor worries about the erratic trade policies of Trump as the president visited Michigan, a cradle of the US auto industry, just days before a fresh set of 25 percent import taxes was set to kick in on automotive components.
The trip, on the eve of his 100th day in office, came as Americans take an increasingly dim view of Trump’s economic stewardship, with indications his tariffs will weigh on growth and could drive up inflation and unemployment.
In his latest partial reversal of tariff policies, the Republican president agreed to give carmakers two years to boost the percentage of domestic components in vehicles assembled domestically.
It will allow them to offset tariffs for imported auto parts used in US-assembled vehicles equal to 3.75 percent of the total value of the Manufacturer’s Suggested Retail Price of vehicles they build in the US through April 2026, and 2.5 percent of US production through April 30, 2027.
Auto industry leaders had lobbied the administration furiously during the weeks since Trump first unveiled his 25 percent tariffs on imported vehicles and auto parts. The levies, aimed at forcing automakers to reshore manufacturing domestically, had threatened to scramble a North American automotive production network integrated across the US, Canada and Mexico.
It offers the industry a “little relief” as companies invest in more US production, Trump said as he left Washington for Michigan. “We just wanted to help them … if they can’t get parts, we didn’t want to penalize them.”
The White House said the change will not affect the 25 percent tariffs imposed last month on the 8 million vehicles the United States imports annually.
Autos Drive America, a group representing Toyota Motor, Volkswagen, Hyundai and nine other foreign automakers, said Trump’s order provided some relief “but more must be done in order to turbocharge the US auto industry.”