President Donald Trump is expected to announce a decision to reduce the impact of tariffs on automakers on Tuesday in Michigan, FOX Business confirmed.
A source within the Trump administration said the decision follows the auto industry’s good-faith efforts to move manufacturing back to the US, adding that Trump wants to give them a “runway” with their business.
Commerce Secretary Howard Lutnick said the president is “building an important partnership” with “domestic automakers and our great American workers.”
“This deal is a major victory for the president’s trade policy by rewarding companies who manufacture domestically, while providing runway to manufacturers who have expressed their commitment to invest in America and expand their domestic manufacturing,” Lutnick said.
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The reduction will prevent automakers who are already paying tariffs from also being hit with duties on steel and aluminum, the Wall Street Journal reported. Automakers would also allegedly be reimbursed for tariffs already paid.
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The tariffs were decided on by the Trump administration in an attempt to boost domestic manufacturing and there were plans to impose a separate 25% tariff on auto parts beginning May 3.
Initially, parts that comply with the United States-Mexico-Canada Agreement would be exempt, though the Commerce Department was expected to develop a plan to impose the tariff on non-U.S. components.
The agency was also expected to establish a process for imposing tariffs on other auto parts by late June.
Since a 25% tariff was imposed on all imported passenger vehicles in April, car experts have been concerned that the cost of new vehicles across the industry would take a massive hit.
The National Automobile Dealers Association raised concerns this year over “matching customers with vehicles they can afford,” describing it as “a continuing challenge for America’s new car and truck dealers.”
Fox Business’ Edward Lawrence and Daniella Genovese contributed to this report.
