Trump administration to offer relief to car manufacturers amid continued 25% tariff
, allowing manufacturers additional time to shift production to US soil.
While the 25 per cent tariffs on imported vehicles and components will continue, they will be restructured to prevent overlap with other tariffs, including those on steel and aluminium, according to a White House representative, quoted by the New york Times.
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Vehicle manufacturers will be exempt from paying multiple tariffs on these essential materials.
Manufacturers will receive partial compensation for tariffs paid on imported components. The reimbursement scheme will provide up to 3.75 per cent of a new vehicle's value in the first year, gradually decreasing over two years, as confirmed by the spokesperson.
The automotive industry responded positively to these changes.
"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 US economy," Mary T Barra, CEO of General Motors, said in a statement Monday. "We appreciate the productive conversations with the president and his administration and look forward to continuing to work together.
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The 25 per cent vehicle import tariff became effective April 3, with an expansion to include parts scheduled for Saturday.
"President Trump is building an important partnership with both the domestic automakers and our great American workers," Howard Lutnick, the commerce secretary, said in a statement. "This deal is a major victory for the president's trade policy by rewarding companies who manufacture domestically, while providing runway to manufacturers who have expressed their commitment to invest in America and expand their domestic manufacturing," he further added.
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At Tuesday morning's news conference, White House press secretary Karoline Leavitt announced Trump's intention to sign an auto tariff-related executive order. Additionally, Treasury Secretary Scott Bessent, while avoiding specific details about tariff relief, emphasised the policy's focus on encouraging domestic production.
However, despite the adjustments, significant tariffs will remain on imported vehicles and components, resulting in substantial price increases for new and used vehicles, alongside higher repair and insurance costs.
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