Islamabad, Apr 29, 2025: In a bid to ease pressure on American automakers, former President Donald Trump’s administration rolled out a plan to reduce the financial burden of auto tariffs by lowering taxes on imported components used in vehicles assembled in the United States.
This policy shift is expected to benefit domestic manufacturers and their workforce significantly, according to official sources familiar with the decision.
Commerce Secretary Howard Lutnick described the initiative as a “notable achievement” for the administration’s trade agenda.
He highlighted that the move reinforces support for companies that produce vehicles within American borders.
“President Trump is forging strong ties with homegrown automakers and the American labor force,” said Lutnick in a statement issued by the White House.
The primary aim of the adjustment is to prevent overlapping duties on cars built in the U.S. with foreign-sourced parts.
Under the new plan, automakers won’t have to pay additional taxes on materials like steel and aluminum, which had previously been taxed separately.
Additionally, companies will receive refunds for tariffs already paid, offering much-needed financial relief.
According to a report by The Wall Street Journal, which broke the story, the change addresses widespread industry concern over the harmful consequences of earlier tariff policies, especially for legacy manufacturers in Detroit.
A White House representative confirmed that the revised measures would take effect soon.
Trump is also scheduled to visit Michigan, a key automotive state, as he marks 100 days in office.
His term has been characterized by aggressive trade reforms, including imposing tariffs on various imports.
The decision to ease auto tariffs reflects the administration’s willingness to adapt in response to industry feedback and economic challenges.
Earlier, leading carmakers had urged the administration to reconsider its approach. Michigan, home to automotive giants such as Ford, General Motors, and Stellantis (Fiat Chrysler), as well as over a thousand suppliers, stood to be deeply affected.
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A consortium of major automakers, including Toyota, Hyundai, and Volkswagen, had warned that steep import duties would push up car prices, reduce dealership traffic, and make auto repairs costlier for consumers.
They stressed that tariffs would disrupt the global parts supply chain and strain U.S. production facilities.
Industry leaders also voiced fears of supplier bankruptcies, job losses, and manufacturing delays, warning that the collapse of even one key vendor could ripple through the sector and undermine economic stability.
