President Donald Trump will ease some of the pressure on U.S. carmakers by cutting tariffs on foreign auto parts. On Tuesday, he plans to sign an order that gives relief to companies building cars in the United States. The move comes after strong warnings from carmakers who said tariffs were raising their costs by billions.
Trump’s administration had placed a 25% tariff on many auto parts. This raised the cost of making a car in the U.S. by around $5,000. The “Big Three”—Ford, General Motors, and Stellantis—faced over $42 billion in new costs, according to industry studies.
A Step to Boost U.S. Jobs
Treasury Secretary Scott Bessent spoke with reporters on Monday. He said Trump’s goal is clear: bring jobs back to American factories.
“We want to give automakers a fast, efficient path to create jobs in America,” said Bessent.
Commerce Secretary Howard Lutnick also praised the new move. He said it rewards companies that invest in U.S. plants.
“This is a win for our trade policy. We support those who commit to American jobs,” Lutnick said.
Partial Refunds for Car Parts
Under the new plan, carmakers will not face repeated tariffs on things like steel and aluminum. If a company makes cars in the U.S., it can apply for a partial refund on import fees. These refunds will be based on how much of the car was made in the U.S.
Cars made outside the U.S. will still pay full tariffs. But some added charges may be lifted in special cases.
A Big Announcement in Michigan
Trump is expected to reveal the full plan during a rally in Michigan. This visit marks his 100th day since returning to the White House.
His time back in office has already brought big changes to U.S. trade policy. He has placed new taxes on many imports, including a huge 145% tariff on goods from China.
Global Trade Reactions
The White House says talks will begin soon with 17 major trading partners. These talks aim to fix problems caused by the tariffs. Bessent admitted the strategy can cause short-term confusion. But he said this is part of a bigger plan.
“Uncertainty gives us power in talks,” he said. “Deals are coming. Once they do, things will settle.”
Still, many are worried about shortages and price hikes. Some stores have already raised prices. Others fear delays in getting parts and products. Bessent said those fears are not needed.
“Our retailers have prepared. There won’t be major shortages,” he claimed.
Amazon Tensions Rise Again
This new plan follows a tense week between the White House and Amazon. Reports said Amazon was thinking about showing tariff costs on its website. The idea was to help shoppers understand price changes. The news led to a direct phone call between Trump and Amazon founder Jeff Bezos. Later, Trump praised Bezos for backing off the plan.
White House Press Secretary Karoline Leavitt called Amazon’s idea a “hostile and political act.” She claimed it would stir panic and turn shoppers against U.S. trade rules.
“This isn’t something they tried when inflation hit under Biden,” she said.
Big Picture: Protecting U.S. Industry
Trump’s goal is to protect American factories and workers. He believes that strong tariffs will force companies to make more products in the U.S. His team says this helps local businesses and grows the economy. But critics argue it may slow trade and raise prices.
Many industry leaders hope the new relief plan will strike a balance. It gives carmakers a break while still pushing for U.S. jobs. This new plan shows Trump is trying to calm fears in the auto sector. He wants to help U.S. carmakers stay strong while still pushing his America-first trade plan.
As Trump visits Michigan, all eyes will be on how the industry reacts. Will this be enough to stop price hikes and keep factories open?
One thing is clear: the trade war may not be over, but U.S. automakers just got a small break.