According to the Wall Street Journal, U.S. President Donald Trump may announce a tariff relief measure today, freeing the U.S. automakers from some burden.
Ever since Trump became the president, he has imposed tariffs on several countries and many specific goods, including vehicles and their parts. The 25% tariffs on imported auto was imposed in early April while the 25% duty on its foreign part is set to take effect on May 3.
This significantly affects the business of several automakers, including American based. More than 50% of passenger vehicles sold in the U.S. were made on foreign soil, and even those that were manufactured domestically still used parts imported from other countries.
Among the companies affecting the tariff, one of which is Tesla, owned by Ellon Musk, one of Trump’s allies.
The company recently published its disappointing performance in its 1Q25 financial results despite the impact of tariffs that took effect in early second quarter. Tesla also confirmed its withdrawal from its early 2025 guidance.
Musk said that the impact from the tariffs is significant despite his company localizing its manufacturing and barely using foreign parts. Moreover, Tesla’s EV that was produced in China and Germany was never sold in the U.S. Therefore, it should not be affected by the import tariff.
As the tariff on auto foreign parts is about to take effect, WSJ now reported on a possible relief measure. According to the new agency, Trump may announce relief that will allow the U.S. automakers subjected to auto tariff to not be exposed to other tariffs, such as specific good levy on steel and aluminum.
Moreover, they may also be eligible for reimbursement during one year. The amount they would receive is equal to 3.75% of the value of the car made in the U.S. There is a speculation that this relief will allow U.S. automakers to relocate their supply chains more domestically.
