Why Trump is easing tariffs on imported auto parts
What's the story
US President Donald Trump is considering a major change in his auto tariff policy.
In response to appeals from the industry, the move could see levies on imported parts for cars and trucks made in the US, reduced to some extent.
Imported vehicles might also be exempt from separate tariffs on aluminum and steel, a White House official said.
Policy endorsement
Commerce Secretary hails the shift
Commerce Secretary Howard Lutnick lauded the expected policy shift.
"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."
This highlights the administration's commitment to supporting domestic production and investment.
Announcement plan
Trump to announce changes in Michigan
The proposed change in tariff policy will be announced by Trump during his visit to Michigan, a critical territory for the American automobile industry.
A proclamation to trigger the changes could be signed ahead of Trump's speech in Macomb County, known for its car manufacturing and blue-collar workforce.
The location was chosen deliberately considering its importance in the auto industry, and its fit with the new tariff policy changes.
Strategy update
New tariff strategy to be implemented soon
The new tariffs come ahead of a planned 25% levy on foreign auto parts, set to come into effect on May 3.
Under the new rules, automakers would receive partial refunds for tariffs on imported auto parts according to the value of their domestic car production.
The reimbursements would decrease gradually, incentivizing automakers to move more of their supply chain into the US while giving them time to adapt.
Industry response
Industry leaders support Trump's tariff policy changes
Automakers, dealers and parts suppliers have welcomed the changes.
Ford CEO Jim Farley said they "welcome and appreciate these decisions by President Trump, which will help mitigate the impact of tariffs on automakers, suppliers and consumers."
General Motors CEO Mary Barra also supported the move saying, "We believe the president's leadership is helping level the playing field for companies like GM and allowing us to invest even more in the US economy."