Summary
- Tariff relief could eliminate costs for major car companies
- Commerce Department plans import adjustment offset for U.S. vehicles
- Trump’s decision on tariff relief expected soon, Moreno says
WASHINGTON, (Reuters) – U.S. President Donald Trump is considering significant tariff relief for U.S. auto production that could effectively eliminate much of the costs major car companies are paying, Republican Senator Bernie Moreno and auto officials told Reuters on Friday.
“The signal to the car companies around the world is look, you have final assembly in the U.S.: we’re going to reward you,” Moreno said in an interview. “For Ford, for Toyota, for Honda, for Tesla, for GM, those are the almost in order of the top five domestic content vehicle producers – they’ll be immune to tariffs.”
Moreno, a former car dealer, serves on the Senate Commerce Committee that oversees auto issues and is active in automotive policy matters.
Automakers’ shares rose on the news first reported by Reuters. Ford closed up 3.7%, Chrysler-parent Stellantis rose 3.2% and GM closed up 1.3%.
The extended tariff relief — if finalized — would give automakers more incentive to move car production to the United States, which would fulfill a key Trump policy aimed at creating more jobs for Americans.
The Commerce Department said in June that it planned an import adjustment offset equal to 3.75% of the suggested retail price for eligible U.S. assembled vehicles through April 2026 and then a second year at 2.5% to address tariffs from imported automobile parts.
Trump is considering keeping the offset at 3.75% and extending the length of the credit to five years, and expanding the offset to U.S. engine production, Moreno and auto officials said.
Moreno said he thinks Trump will make a final decision soon. “It’s obviously up to the president, but (I’m) absolutely thrilled that we’re creating now an incentive system that really separates these importer only versus the ones that are manufacturing in America.”
Moreno added automakers with significant final production in the United States should get tariff breaks: “Look, at the end of the day, they’re doing exactly we want them to do – paying employees in America well and doing final assembly in the United States with the cars that they sell here.”
Asked for comment on the proposal, a White House official told Reuters that Trump and the administration “are committed to a nuanced and multi-faceted approach to securing domestic auto and auto parts production. Until any official action is signed by the president, however, any discussion about administration policymaking is speculative.”
In May, Trump imposed 25% auto tariffs on more than $460 billion worth of imports of vehicles and auto parts annually, but has since struck deals to reduce those tariffs on some countries including Japan, the United Kingdom and the European Union.
The Commerce Department said in August that it was hiking steel and aluminum tariffs on more than 400 products including numerous auto parts totaling $240 billion in annual imports. The parts include automotive exhaust systems and electrical steel needed for electric vehicles as well as components for buses.
The automakers did not immediately respond to requests for comment. One open question is whether the automakers will be able to apply the relief to the impact of aluminum and steel tariffs.
Separately, the Trump administration has delayed finalizing new tariffs on heavy-duty trucks that were set to take effect this week it considers the extent to which it will impose new 25% levies.
GM said earlier this year the company will face up to $5 billion in gross tariff-related costs this year, while Ford cited a $3 billion gross hit.
Reporting by David Shepardson; Editing by Chizu Nomiyama and Anna Driver
Source: worldautoforum.com
