President Trump will sign an executive order on Tuesday to relax some of his 25% tariffs on autos and auto parts, the White House said, a significant reversal as the import taxes threatened to hurt domestic manufacturers. Automakers and independent analyses have indicated that the tariffs could raise prices, reduce sales, and make US production less competitive worldwide, per the AP. White House press secretary Karoline Leavitt said at a Tuesday briefing that Trump would sign the order later in the day but declined to provide details on it.
Treasury Secretary Scott Bessent, who joined Leavitt at the White House briefing, said the goal was to enable automakers to create more domestic manufacturing jobs. "President Trump has had meetings with both domestic and foreign auto producers, and he's committed to bringing back auto production to the US," Bessent said. "So we want to give the automakers a path to do that, quickly, efficiently, and create as many jobs as possible." The Wall Street Journal reported that the order involves changes in how the import taxes would be enforced to prevent multiple tariffs from being charged on foreign-made vehicles and reducing tariffs on parts imported to make autos domestically. The changes would also be retroactive.
The tariffs imposed by Trump were seen by some as an existential threat to the auto sector. Arthur Laffer, whom Trump gave the Presidential Medal of Freedom to during his first term, said in a private analysis that the tariffs without any modifications could add $4,711 to the cost of a vehicle. It remains unclear what impact Trump's broader tariffs will have on the US economy and auto sales. Most economists say the tariffs—which could ultimately hit most imports—would raise prices and slow economic growth, possibly hurting auto sales despite the relief that the administration intends to offer on its previous policies. (More President Trump stories.)
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