Trump Adds Exemptions, Reimbursements to Auto Tariffs

President Donald Trump is set to sign an executive order easing the 25% tariffs on the automotive industry, addressing concerns from automakers about higher prices and production cuts. The order will prevent automakers from paying overlapping tariffs on vehicles and raw materials, and will apply retroactively, allowing for reimbursement of previously paid duplicate tariffs. While a 25% tariff on imported auto parts remains, manufacturers can receive partial reimbursements—up to 3.75% of a U.S.-made car’s value in the first year and 2.5% in the second year—before these benefits phase out. Vehicles assembled in the U.S. with at least 85% domestic content will be exempt from tariffs, incentivizing domestic production. The move, announced before Trump’s trip to Michigan, is intended to spur investment and job creation in U.S. manufacturing. However, specifics on the reimbursement process and funding have not been fully disclosed.