White House unveils plan to ease tariff impact on US automakers

The White House plans to ease the impact of tariffs on domestic automakers by preventing overlapping duties and offering a credit for some tariffs, as the industry faces rising costs and regulatory uncertainty from the president’s trade policies.

President Donald Trump will unveil an executive order during a speech in Michigan Tuesday evening that will keep domestic auto manufacturers from being hit by multiple sets of tariffs, White House officials told reporters in a briefing call Tuesday morning. They were granted anonymity per the ground rules of the call.

The new order will also allow the car companies to offset a percentage of the retail price of their vehicles in order to lower the overall tariff rate over the next two years.

The auto sector faced not only 25 percent tariffs on auto imports, which were imposed earlier in April, but additional duties on parts imports that go into effect Saturday. They also face tariffs on steel and aluminum, which are frequently used as inputs for vehicle production.

Senior officials still plan to move forward with a 25 percent tariff on imported auto parts, but car manufacturers who make their vehicles in the U.S. would be offered relief from some of those duties.

Companies will also be allowed to offset 15 percent of the retail price of vehicles built in the U.S. — regardless of where the company is headquartered — for the first year, followed by a 10 percent offset in the second year. That would result in a credit of 3.75 percent on their tariff payment for a vehicle produced in the U.S. this year and a credit of 2.5 percent in the second year — lowering the overall duties they pay.

The decision comes at the request of top U.S. car makers, who have heavily lobbied the administration for tariff exemptions. POLITICO first reported last week that the White House was considering a move to help the auto industry by eliminating the “stacking” of various sets of tariffs that Trump has imposed this spring.

The goal is to help auto companies buy time as they shift their auto parts manufacturing to the U.S.. The White House plans to use tariff revenue to pay for the reimbursement to car makers, the officials on the call said.

Speaking at the White House Tuesday morning, Treasury Secretary Scott Bessent confirmed the administration was planning action to boost the auto sector.

"The goal here is to bring back the high quality industrial jobs to the U.S., President Trump is interested in the jobs of the future, not jobs of the past,” Bessent said. “We don't need to necessarily have a booming textile industry like where I grew up, again, but we do want to have precision manufacturing and bring that back."