Donald Trump is partially backing down on tariffs on auto parts. The move benefits US automakers, while import tariffs on cars appear to remain the same.
Donald Trump is now changing the controversial tariffs that were recently imposed on the auto industry last month.
The relief applies to cars produced in the US. The high tariffs of 25 percent on imported car parts are being adjusted.
Full details of the new plan have not yet been released, but it appears that the changes will primarily benefit companies with car production in the United States.
Car manufacturers in the United States have paid a 25 percent tariff on certain imported auto parts. They will now be exempt from tariffs on steel and aluminum used in production.
The Wall Street Journal writes that.
The move was announced ahead of Trump's visit to the auto capital of Michigan, an important state – if not the most important – for the entire auto industry in the country.
The tariff policy under Trump has significantly affected the automotive industry. The high rates have created uncertainty and increased costs for many manufacturers.
Effects on the US auto industry
The new agreement also includes a possible compensation. Car manufacturers can get a refund of customs duties under certain conditions.
The compensation can amount to up to 3.75 percent of the value of a car. This applies specifically to cars manufactured in the United States.
This is reported by the Wall Street Journal, which has gained insight into the planned changes to the customs regulations.
Commerce Secretary Howard Lutnick sees the agreement as a success for government policy. He speaks positively about the new initiatives.
– This deal will be a major victory for the president's trade policy. It rewards companies that already produce here in the United States.
Details of Trump's new tariff plan
Lutnick also added that the agreement extends to other manufacturers. This applies to those manufacturers who have shown a willingness to invest in the United States.
They must have expressed a commitment to expanding production in the country. The goal is to further strengthen the domestic industry.
It is important to note, however, that tariffs on finished imported cars appear to remain unchanged. The relief focuses on parts for local production in the US.
The entire auto industry has been under pressure from existing tariffs. The changes could provide some economic relief to American factories.
The future will show the full impact of the adjusted customs rules. Much depends on the final details and how the rules are implemented in practice.
