Trump Signs Executive Order to Ease Auto Tariff Policy, Industry Still Faces Pressure

According to Jinse, U.S. President Trump signed an executive order to mitigate the impact of auto tariffs, making concessions after weeks of intensive lobbying by automakers, parts suppliers, and car dealers. The industry had warned that exorbitant tariffs might increase car prices, lead to factory shutdowns, and cause unemployment. Under the executive order signed aboard Air Force One, imported cars will be exempt from additional aluminum and steel tariffs to avoid the cumulative effect of overlapping tariffs. A senior official from the U.S. Department of Commerce stated that the White House will also adjust a 25% tariff on auto parts originally set to take effect on May 3, allowing car companies manufacturing and selling vehicles in the U.S. to apply for a tariff deduction of up to 3.75% (25%X15%) of the vehicle's value. This deduction will decrease to a maximum of 2.5% (25%X10%) after one year and will be eliminated the following year. The policy applies to cars produced after April 3. Although the latest adjustments will somewhat alleviate cost pressures on automakers, parts suppliers, and dealers, it remains challenging to determine the actual financial relief. The entire industry is still dealing with a 25% tariff on imported cars, which could significantly increase industry costs and exacerbate supply chain pressures.