Trump Signs Order Easing Auto Tariffs, Offers Temporary Relief for U.S. Assemblers

President Donald Trump signed an executive order on Tuesday easing some of the automotive tariffs introduced earlier this month. The move aims to reduce cost burdens on automakers by adjusting how overlapping tariffs are applied.

While the existing 25% import tariff on vehicles remains unchanged, the new order addresses concerns over cumulative tariffs — particularly the “stacking” of multiple duties such as those on steel and aluminum — that were raising vehicle production costs.

Reimbursement Plan for U.S.-Assembled Vehicles

Under the new measures, vehicles assembled in the U.S. will be eligible for partial reimbursements on parts-related tariffs for the next two years. The relief includes:

• 3.75% offset of a car’s value for vehicles assembled before May 1, 2026

• 2.5% offset on those assembled from May 1, 2026, through April 30, 2027

The percentages are calculated by applying a 25% duty to a portion of the vehicle's value: 15% in the first year and 10% in the second.

President Trump, during a visit to Michigan to mark his first 100 days back in office, said the move is aimed at giving manufacturers breathing room.

“We just wanted to help them during this little transition,” Trump said. “If they can’t get parts, we didn’t want to penalize them.”

Industry Reaction: Relief Welcomed, Uncertainty Lingers

The decision follows intense lobbying from automakers and industry groups, who had warned that the upcoming parts tariffs could disrupt production and increase costs. Six top auto industry organizations, including the Alliance for Automotive Innovation, submitted a joint letter urging the administration to reconsider the levies.

“That would be a positive development and welcome relief,” the groups said.

Executives from major auto companies also expressed cautious optimism:

• Ford CEO Jim Farley welcomed the decision, calling it helpful for automakers, suppliers, and consumers.

• Stellantis Chair John Elkann praised the relief but said further assessment was needed.

• GM CEO Mary Barra said the order helps level the playing field and supports more U.S. investment.

However, GM remained cautious. CFO Paul Jacobson noted that future tariff impacts could be significant. The company suspended its 2025 guidance, halted stock buybacks, and delayed its quarterly earnings call to evaluate the changes.

Next Steps and Open Questions

While the executive order provides short-term relief, key questions remain — such as the exact process for automakers to claim reimbursements and how long the policy will remain in place.

Jennifer Safavian, head of Autos Drive America, called it “some welcome relief” but stressed the need for a more stable and growth-oriented manufacturing climate in the U.S.

Conclusion

The easing of tariffs offers temporary relief to automakers, particularly those with U.S. assembly operations. But with ongoing trade tensions and regulatory uncertainty, industry leaders say a more comprehensive strategy is needed to ensure the competitiveness of the American automotive sector.