Autoworkers at Nissan’s Smyrna Vehicle Assembly Plant in Tennessee, June 6, 2022. The plant employs thousands of people and produces a variety of vehicles, including the Leaf EV and Rogue crossover.
Michael Wayland / CNBC
The White House on Tuesday confirmed plans for the Trump administration to soften the impact of automotive tariffs, as the car industry grapples with regulatory uncertainty and additional costs due to the levies.
Current tariffs of 25% on imported vehicles into the U.S. will continue, but the new measures will prevent other adjacent levies, such as an additional 25% tariffs on steel and aluminum, from “stacking” on top of the others, a White House official told NBC News.
Additional 25% tariffs on auto parts that are expected by May 3 are still scheduled to take effect, but there will be an ability for some reimbursements, the official said.
The reimbursements on auto parts tariffs include up to an amount equal to 3.75% of the value of a U.S.-made car for one year, followed by 2.5% of the car’s value in a second year, and then would be phased out altogether, according to The Wall Street Journal, which first reported the expected changes Monday night.
White House Press Secretary Karoline Leavitt told media Tuesday morning that President Donald Trump would sign an executive order later in the day regarding the auto tariffs, but she declined to disclose any specific changes.
The expected changes follow automakers and auto policy groups lobbying the Trump administration for some relief on tariffs, which have been stacking up on the automotive industry.
Last week, six of the top policy groups representing the U.S. automotive industry, including the Alliance for Automotive Innovation that represents most major automakers, uncharacteristically joined forces to lobby the Trump administration against implementing the upcoming tariffs on auto parts.
“President Trump has indicated an openness to reconsidering the administration’s 25 percent tariffs on imported automotive parts – similar to the tariff relief recently approved for consumer electronics and semiconductors. That would be a positive development and welcome relief,” the groups set in a letter to Trump officials.
The groups — representing franchised dealers, suppliers and nearly all major automakers — said the upcoming levies could jeopardize U.S. automotive production and noted many auto suppliers are already “in distress” and wouldn’t be able to afford the additional cost increases, leading to broader industry problems.
Ahead of the company reporting its first-quarter results Tuesday, General Motors CFO Paul Jacobson told reporters that “future impacts of tariffs could be significant.”
In response to the regulatory uncertainty and expected cost increases, GM discontinued its 2025 guidance, which did not take tariffs into effect; suspended stock buybacks; and delayed its quarterly investor call by two days until Thursday.
Automakers expressed appreciation for the expected changes, but continue to face significant cost increases.
“Ford welcomes and appreciates these decisions by President Trump, which will help mitigate the impact of tariffs on automakers, suppliers and consumers,” Ford CEO Jim Farley said in an emailed statement.
Stellantis Chair John Elkann echoed those remarks: “Stellantis appreciates the tariff relief measures decided by President Trump. While we further assess the impact of the tariff policies on our North American operations, we look forward to our continued collaboration with the U.S. Administration to strengthen a competitive American auto industry and stimulate exports.”
GM CEO Mary Barra also thanked Trump, saying it was “helping level the playing field for companies like GM and allowing us to invest even more in the U.S. economy.