U.S. President Donald Trump is expected to ease the impact of his automotive tariffs by preventing them from stacking with existing duties, such as those on steel and aluminum, according to a Wall Street Journal report. Citing sources familiar with the matter, the report stated that Trump will also scale back some tariffs on imported auto parts, providing relief to U.S. automakers.
The move, expected to be announced ahead of Trump’s Michigan rally near Detroit, would be retroactive, potentially allowing manufacturers to seek reimbursement for tariffs already paid. Additionally, automakers could receive reimbursements up to 3.75% of the value of a U.S.-made vehicle for one year under the modified auto parts tariff plan.
Trump’s 25% tariff on imported cars took effect in early April, while a similar 25% tariff on foreign auto parts is set to begin on May 3. The policy adjustment appears aimed at giving automakers more time to relocate supply chains to the U.S., aligning with Trump's broader trade strategy.
Concerns have risen over the impact of higher car prices, as even domestically produced vehicles rely heavily on imported components. Electric vehicle giant Tesla (NASDAQ:TSLA) recently withdrew its 2025 guidance, citing uncertainty surrounding Trump’s tariffs, with CEO Elon Musk warning of a "significant" business impact.
The anticipated tariff relief could offer temporary support to automakers while reinforcing Trump’s push for U.S.-based manufacturing.