In a major shift ahead of his upcoming rally near Detroit, President Donald Trump has agreed to soften the impact of tariffs on the U.S. auto industry, according to reports from U.S. media on Monday.
The decision comes as Trump prepares to celebrate his first 100 days in office, with the move seen as an effort to bolster support among key manufacturing sectors.
According to The Wall Street Journal, the Trump administration will no longer require automakers to pay multiple layers of tariffs on imported vehicles. Companies facing the hefty 25% tariff on car imports will now be exempt from additional duties, such as those previously imposed on steel and aluminum.
The administration is also reportedly allowing some reimbursements for foreign auto parts, with levies that were set to begin on May 3 now being adjusted.
U.S. automakers, especially those with deep investments in Mexico and Canada, have been among the sectors hardest hit by Trump’s earlier tariffs.
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Despite Trump’s renegotiation of the North American Free Trade Agreement (NAFTA) during his first term, Detroit-based carmakers maintained substantial operations across the border, exposing them to new tariff risks.
Industry experts had warned that the compounded tariffs could lead to higher car prices, hurt U.S. auto sales, and potentially threaten thousands of American jobs.
Commerce Secretary Howard Lutnick praised the revised policy, describing it as an effort to build “an important partnership” with the U.S. auto industry.
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“This deal is a major victory for President Trump’s trade policy, rewarding companies already manufacturing domestically and giving manufacturers a clear path to further invest in America,” Lutnick said, according to The Wall Street Journal.
Automakers were quick to express their relief. General Motors CEO Mary Barra said, “We’re grateful to President Trump for his support of the U.S. automotive industry and the millions of Americans who depend on us.”
The new tariff adjustments are expected to ease some of the economic pressures on automakers while reinforcing Trump’s broader strategy of encouraging domestic manufacturing and investment.
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