Trump to Sign Executive Order Providing Automakers Tariff Relief

President Donald Trump will sign an executive order on Tuesday relaxing some of his 25% tariffs on autos and auto parts.

The directive is the result of conversations directly with domestic auto manufacturers, a senior Commerce Department official said on a call with reporters.

The order “will go substantially toward reassuring American auto manufacturing,” Treasury Secretary Scott Bessent told reporters Tuesday morning.

“And again, the goal here is to bring back the high-quality industrial jobs to the U.S.,”
he added. “President Trump is interested in the jobs of the future, not the jobs of the past.”

The administration will offer automakers that finish their vehicles domestically a 15% offset of the cost of the tariffs. Automakers can choose how to allocate the offset.

The current 25% tariff leveled on imported cars will remain intact, but other similar tariffs, such as tariffs on steel and aluminum, will not stack on top of the 25% auto tariff. 

The offset is not a payment from the government, a Commerce official said on the press call. Rather, domestic auto manufacturers that finish building cars in the U.S. will receive an offset for automobile parts tariffs equal to 3.75% of the Manufacturer’s Suggested Retail Price of a manufacturer’s U.S. production for the next 12 months, and 2.5% of U.S. production for the year following.

Offsets will only be available to the finished producer making and selling the car.

The Trump administration expects the order to catalyze job growth and prosperity for domestic car manufacturers, a senior Commerce official said.

“President Trump, his overriding concern and belief is that economic security is national security,” Bessent said. “National Security is economic security, and we saw during COVID that our supply chains got cut off, and we need to bring back a lot of those supply chains, whether it’s in semiconductors, medicine, or steel, and we have to onshore those so it’s a combination of making trade free and fair and remedying this gaping national security hole that he was left with.”

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