Donald Trump agrees to ease auto tariffs

On Tuesday, April 29, Donald Trump took advantage of a trip to Michigan, “the heart of American industry,” to “tout a new twist in his trade war: further tariff relief for some of the world’s biggest carmakers,” reports the Financial Times from the United Kingdom.

Just before taking the plane to participate in a meeting in the suburbs of Detroit, the automobile capital, where he was to celebrate his first hundred days in the White House , the president had in fact signed a decree exempting these manufacturers from the 25% customs tariffs on steel and aluminum, applied since March 12. A small breath of fresh air, knowing that from May 3 they will have to pay a 25% tax on imported spare parts.

In addition, their taxes will be reduced for two years to give them "time to find new parts suppliers in the United States," explains The Wall Street Journal. In the first year, they will be able to request a refund of a portion of these taxes, up to 3.75% of the recommended retail price of new vehicles, then 2.50% in the second year.

"The bosses of Ford, General Motors and Stellantis welcomed the decisions, but some of their senior executives complain that the pricing structure remains too complex," the Financial Times added.

In fact, it's becoming difficult to navigate this tangle of measures: the 25% tax on imported vehicles, effective since April 3, remains in place, as does the 20% tax levied on all imports from China. However, parts purchased in Mexico and Canada and covered by the Canada-United States-Mexico (CUSMA) free trade agreement signed in 2020 will circulate freely.

“According to a senior U.S. official, all this means that a USMCA-compliant car made with 85 percent domestic content will not have to pay tariffs on parts in the first year, with the domestic content rate rising to 90 percent in the second year,” summarizes the Wall Street Journal .

In the White House's view, the tariffs "are necessary to bring back lost manufacturing jobs," explains The Washington Post. " The goal is to encourage Americans to buy American-made cars and force more foreign automakers to build factories in the United States."

Donald Trump, however, was persuaded to relax his policy by major automotive companies, worried about seeing their production costs explode and their profits plummet. “General Motors, Volvo Cars, and Porsche have already reversed their profit forecasts for 2025,” warns the Financial Times. And in early April, Stellantis announced the temporary layoff of 900 employees in the United States.