President Donald Trump signed an executive order Tuesday rolling back parts of the automotive tariffs his administration introduced earlier this month, following growing pressure from carmakers and suppliers facing rising costs and regulatory confusion.
The 25% tariff on imported vehicles will remain, but the order addresses complaints about overlapping tariffs—like those on steel and aluminum—that had significantly increased overall costs for auto imports.
A separate 25% duty on auto parts, set to take effect May 3, is still moving forward. However, manufacturers assembling vehicles in the U.S. can now qualify for partial rebates on those costs. For cars built before May 1, 2026, companies could recoup up to 3.75% of the vehicle’s value. That reimbursement rate will drop to 2.5% for cars finished before April 30, 2027.
Trump, speaking during a visit to Michigan marking his first 100 days back in office, said the administration didn’t want to punish automakers during a difficult adjustment period. “If they can’t get parts, we didn’t want to penalize them,” he said. Still, he warned companies to bring production home: “We’ll slaughter them if they don’t.”
The move came after six major auto industry groups, including ones representing both U.S. and foreign automakers, sent a rare joint appeal to the administration last week, warning that the new tariffs could disrupt domestic manufacturing and threaten already struggling parts suppliers.
General Motors, which postponed its earnings call and dropped its 2025 forecast due to the uncertainty, welcomed the change. CEO Mary Barra thanked the president, saying it would “level the playing field” and help boost U.S. investment.
Ford CEO Jim Farley praised the decision as easing some of the tariff burden, while Stellantis Chair John Elkann called the relief helpful as the company continues assessing the broader impact on its North American operations.
Jennifer Safavian, head of Autos Drive America, also welcomed the update but said more needs to be done to create long-term stability for U.S. manufacturing.
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