After vigorous lobbying by business leaders, the Trump administration has indicated that car components would be exempt from tariffs. As initially reported by The Wall Street Journal, White House officials on Monday affirmed President Trump’s intention to lower tariffs on auto parts for vehicles made in the United States. Additionally, the government will stop automakers from paying additional tariffs on top of current duties, such those on aluminium and steel. The president is anticipated to sign a proclamation formalising the shift as early as Tuesday.
In a statement, Commerce Secretary Howard Lutnick stated, “President Trump is establishing a significant partnership with both the domestic automakers and our great American workers. The ruling is in line with Trump’s statement from mid-April, in which he expressed his desire to “assist automakers” by giving them “some time” to relocate their component manufacturing operations. Up until May 3, Trump had exempted car parts from the 25% tariffs. Due to retaliatory tariffs, many large US automakers, including Tesla and Ford, have either halted plans for mass-producing new models or postponed exports to China.
Since declaring reciprocal tariffs on all nations at the start of the month, Trump has made several U-turns. In the face of mounting uncertainty, investors accelerated the sale of US assets, with many predicting a severe economic downturn triggered by the global trade war.
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