Automakers welcome the president’s flexibility in car rates.
President Donald Trump signed an executive order later today to mitigate the impact of tariffs on cars, the White House said.
Earlier this month, the President’s 25% tariffs were enforced on imported vehicles into the US. The tariffs are intended to strengthen domestic automobile manufacturing.
Senior Commerce Department officials confirmed that the automobile company will pay 25% tariffs on imported vehicles, but they do not face any other tariffs, such as a 25% collection on steel and aluminum and a universal baseline obligation of 10.
Trump’s executive action aims to prevent certain tariffs from stacking up on each other.
Customs duties on foreign auto parts, which are scheduled to take effect on May 3rd, will also be adjusted. Automakers receive a tax credit of up to 15% of the value of vehicles assembled in the US. This could be applied to the value of imported parts, officials say.
The latest measure is the “final finishing touches” on revitalizing the automotive industry. “It’s designed to allow all domestic automakers to grow plants, nurture new jobs and build more factories in the US,” a senior Commerce Department official said in a call with a reporter.
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The president has pledged to return car manufacturing to the United States, Treasury Secretary Scott Bescent said.
“We want to give automakers a pathway to do it quickly and efficiently and create as many jobs as possible,” Bescent said at a press conference on April 29th with press president Karoline Leavitt.
Trump travels to Michigan to celebrate his first 100 days of success in office during a rally outside Detroit.
The automotive industry welcomes an administration that softens the potential economic impact of tariffs and offers some flexibility.
In a statement by the Epoch Times, Ford CEO Jim Farley said the company is “welcome and grateful” the president’s decision to mitigate tariff-related impacts on automakers, suppliers and customers.
“With proper policies in place, it’s important that major vehicle importers rival Ford’s commitment to America’s construction,” Farley said.
“If all companies selling vehicles in the US match Ford’s US manufacturing ratios, another 4 million vehicles will be assembled each year in the US. The US will see a rampage of new gatherings and supplier factories and hundreds of thousands of new jobs.”
Meanwhile, General Motors derives its annual forecast on April 29th. In its first quarter revenue report, the automaker reported strong results, but suspended the remaining annual guidance due to uncertainty surrounding trade policy.
“The future impact of tariffs may be significant,” GM CFO Paul Jacobson said in a call with analysts and shareholders. “We have told people not to resort to previous guidance and will update any further information regarding customs.”
Ford Motor’s shares rose more than 1%, while General Motors slipped about 0.4%. Stellantis, the maker of Jeep, Chrysler and Dodge, rose by around 2%. Tesla Motors shares fell 0.5%.
Jim Farley, president and CEO of Ford Motor Company, will talk to reporters about UAW contract talks at the North American International Auto Show in Detroit on September 13, 2023. Paul Sancya/AP Photo
According to Stephanie Brinley, Associate Director of Auto Intelligence at S&P Global, automotive tariffs will have the widest effect in 2026, leading to slower vehicle sales, production volume and higher costs.
Erin Keating, executive analyst at Cox Automotive, expects tariffs to increase new vehicle prices by up to 15%.
Data from the group’s Kelley Blue Book found that the new vehicle price was $47,462 in March, with little change. Last month, sales skyrocketed 30%. “Many consumers were in a hurry to buy vehicles before the expected tariff-driven price hike took hold.”
The Epoch Times reached out to General Motors and Stellantis for comments.
