President Donald Trump signed two executive orders that will alleviate the effect his sweeping tariffs have on the U.S. auto industry, he announced on Tuesday, ahead of a rally in the automakers’ capital of Michigan.
Carmakers will still pay a 25 percent tariff on auto imports but will no longer be subject to levies on materials such as steel and aluminum. Tariffs “should not all have a cumulative effect (or ‘stack’ on top of one another),” the administration said. Carmakers that build cars stateside are also eligible for tariff relief over the next two years.
“It’s a little bit of help,” Trump said. “It’s a little transition. If they can’t get parts, we didn’t want to penalize them.”
Automakers have said that as planned, Trump’s tariffs would dramatically raise production costs and minimize profits. Although domestic car manufacturers warned the administration that it would take time to boost U.S. manufacturing, Trump enacted tariffs to “bring domestic auto manufacturing back,” Commerce Secretary Howard Lutnick said.
Relief caused by Trump’s tariff modification will likely be short-term, analysts told the New York Times, and American consumers will still be subject to higher car prices regardless. Automotive industry consultant Lenny LaRocca told the Times that Trump’s recent orders give the auto industry “a little bit of time to plan out what their strategy could be.”
Carmakers, who Lutnick said the administration has consulted with since the tariffs were first announced, praised the president’s effort to reduce burdens on the industry.
“We believe the President’s leadership is helping level the playing field for companies like GM and allowing us to invest even more in the U.S. economy,” CEO of General Motors Mary Barra said in a written statement. “We appreciate the productive conversations with the President and his Administration and look forward to continuing to work together.”
Stellantis, the company that owns Dodge, Jeep, Ram, and Chrysler, added that it “appreciates the tariff relief measures decided by President Trump.”
“While we further assess the impact of the tariff policies on our North American operations, we look forward to our continued collaboration with the U.S. administration to strengthen a competitive American auto industry and stimulate exports,” Stellantis Chairman John Elkann said.
Automakers have lobbied the Trump administration for exemptions, hoping that before it imposes tariffs, the White House would make it as easy as possible for U.S. companies to build out manufacturing capabilities.
“The goal here is to bring back the high-quality industrial jobs to the U.S. President Trump is interested in the jobs of the future, not jobs of the past,” Treasury Secretary Scott Bessent said Tuesday. “We don’t need to necessarily have a booming textile industry like where I grew up, again, but we do want to have precision manufacturing and bring that back.”