Trump to ease blow from auto tariffs by giving car makers exemptions on steel, aluminum

President Trump will soften the impact of automotive tariffs later Tuesday by partially rolling back levies on imported car parts, sources familiar with the matter told The Post.

The move means automakers facing Trump’s 25% tariff on foreign vehicles — implemented earlier this month — will not have to pay separate duties on materials such as steel and aluminum, individuals briefed on the policy told the Wall Street Journal.

The changes will be applied retroactively, allowing manufacturers to potentially receive rebates for levies already paid.

Tariffs planned for imported auto parts, originally set at 25% and scheduled to take effect May 3, will also be adjusted.

Automakers will be reimbursed up to 3.75% of the value of each vehicle produced in the US during the first year after the order comes into force.

In the second year, reimbursements would decrease to 2.5% and then be eliminated.

Trump will sign the order before departing the White House for a Michigan rally to mark 100 days since his return to office.

One source close to the White House expressed frustration at the new order, telling The Post, “The entire tariff policy lacks coherence. That’s the problem.”

“What are we doing and why are we doing it?”

Trump’s administration has been in frequent discussions with automakers about the duties, which are viewed by the president and his supporters as a necessary means to spur domestic manufacturing.

“President Trump is building an important partnership with both the domestic automakers and our great American workers,” Commerce Secretary Howard Lutnick told the Journal.

“This deal will be a major victory for the president’s trade policy by rewarding companies who are already manufacturing domestically, while providing a runway to manufacturers who have expressed their commitment in investing in America and expanding domestic manufacturing.”

Automakers approved of the move.

“Ford welcomes and appreciates these decisions by President Trump, which will help mitigate the impact of tariffs on automakers, suppliers and consumers,” Ford CEO Jim Farley said in a statement.

“We will continue to work closely with the administration in support of the president’s vision for a healthy and growing auto industry in America.”

Farley added that his company “sees policies that encourage exports and ensure affordable supply chains to promote more domestic growth as essential.”

General Motors CEO Mary Barra also expressed approval, noting: “We appreciate the productive conversations with the president and his administration and look forward to continuing to work together.”

The mitigating measures are meant to give automakers more time to shift supply chains to the United States.

Automakers will be required to apply for the reimbursements, though the mechanism for how the refunds will be dispersed remains unclear, according to the Journal.

Analysts had warned that Trump’s initial 25% tariff could significantly raise vehicle prices.

Morgan Stanley projected an average increase of $6,000 per car, translating to a 10% to 12% price hike for consumers.

Prior to implementing the tariffs, Trump cautioned automakers against raising vehicle prices.

While some automakers, like Hyundai and Mercedes-Benz, are temporarily absorbing costs or delaying price hikes, others — including Audi, Jaguar Land Rover and Mitsubishi — are pausing US deliveries altogether.

The evolving landscape reflects industry-wide uncertainty, with carmakers balancing tariff impacts, consumer pricing, and long-term supply chain strategy.

The administration’s move to soften auto tariffs follows recent efforts by Trump to temper other aspects of his aggressive trade policies, which triggered market volatility and set off lobbying efforts by businesses and international partners.

Trump and his economic team have been in negotiations with dozens of countries after the president imposed a 90-day pause on his “Liberation Day” tariff suite April 9.

The White House has yet to announce any trade deals with countries, but insist they are getting close, and that 18 one-for-one proposals have been on the table.