President Donald Trump will provide some relief to U.S. manufacturers by reportedly easing some duties imposed on foreign parts in domestically manufactured vehicles.
What Happened: Anonymous officials from the White House told the Wall Street Journal on Monday that car manufacturers paying the tariffs wouldn’t be charged on materials like aluminum and steel, and tariffs already paid on these materials would be reimbursed to the manufacturers.
“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,” U.S. Commerce Secretary Howard Lutnick said in a White House statement.
Officials from the Trump administration shared that the move could be implemented on Tuesday, the report added. The president is also expected to visit Michigan — home to General Motors, Ford, and Stellantis (NYSE:STLA) — to mark 100 days in office.
Why It Matters: The Trump administration’s decision to provide some exemptions in the tariffs on the auto sector had been teased by the President recently, as he had said that automakers “need a little time” to adjust to the new tariff environment and that Trump was “looking for something to help” the automakers.
Michigan-based auto groups had previously criticized the Trump administration for the auto tariffs, saying that the move would cast uncertainty over the employees and the supply chain. “Michigan’s signature industry and the supply chains and employees that sustain it will continue to endure the uncertainty and disruption of these fluctuating trade policies,” the groups said in their statement.
The auto industry in the U.S. currently faces uncertainty over the supply chain, which has been described as ‘complex’ by companies, as the tariffs would cost the domestic auto sector over $108 billion, according to some experts.
However, the move could provide a boost to the sector, especially Detroit-based automakers General Motors Co. (NYSE:GM) and Ford Motor Co. (NYSE:F), as recently, ratings agency S&P shared that the companies were at risk of receiving a negative rating in light of the 25% tariffs.
Price action: GM currently trades for $47.24 on the NYSE, according to Benzinga Pro data.
Check out more of Benzinga’s Future Of Mobility coverage by following this link.
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