Automotive
Trump plans to relax some auto tariffs
Written by Stephanie Ritenbaugh
April 29, 2025
President Trump said he would ease some of the 25% auto tariffs in the latest change in a trade policy already marked by confusion.
Under the existing plan, autos (which started April 3) and components (to start May 3) would be subject to a 25% tariff. There is an exemption for USMCA-compliant exports. However, non-USMCA components in imports from Mexico and Canada will be subject to the 25% tariff. Other countries have announced their own reciprocal tariffs to counter the US.
The administration will offer automakers that finish their vehicles domestically a 15% rebate this year, offsetting the cost of the tariffs, according to a report by the Associated Press. That rebate would be 10% the second year, giving the automakers some time to relocate production of parts outside the country to the United States, a senior US Commerce Department official said. The rebates would be available to domestic and foreign companies with auto plants in the US.
“We just wanted to help them during this little transition, short term,” Trump told reporters at the White House Tuesday. “And if they can’t get parts, we didn’t want to penalize them. And you have a one-year period, and then they have an extra year, but it’s for a very very small part of the car; basically they’re paying 25%.”
The auto tariffs have caused their share of pain across the industry. Carmakers continue downgrading and adjusting vehicle output to meet curtailed market demand.
Last week, Volvo said it plans to lay off hundreds of workers in Pennsylvania, Virginia, and Maryland, due in part to the impact of tariffs.
Stephanie Ritenbaugh
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