Trump Eases Auto Tariffs Amid New Foreign Trade Agreement
On Tuesday, President Donald Trump signed two executive orders to reduce the immediate impact of high auto tariffs, offering short-term relief to automakers and suppliers. The announcement coincided with a preliminary foreign trade deal by his administration.
Speaking in Michigan on his 100th day in office, Trump introduced a relief package that enables car manufacturers to offset some of the costs of imported auto parts. Under the plan, companies producing vehicles in the U.S. can earn credits worth up to 3.75% of the vehicle’s retail price through April 2026. This benefit will taper down to 2.5% by April 2027.
The initiative is designed to help companies adjust during a two-year restructuring of the supply chain.
The decision came after automakers warned that the impending 25% tariffs on imported parts—scheduled to take full effect on May 3—could lead to higher consumer prices, production issues, and job losses.
Major U.S. automakers such as GM, Ford, and Stellantis praised the administration’s move, calling it a stabilizing step for the industry.
Commerce Secretary Howard Lutnick also disclosed that a trade agreement with an unnamed foreign nation is awaiting parliamentary approval. President Trump hinted at India as a possible partner, stating, “India is coming along great.”
Despite these easing measures, Canadian Chamber of Commerce President Candace Laing emphasized that only the complete removal of tariffs would restore full confidence. “The constant policy shifts keep uncertainty alive,” she said.
The announcements boosted investor optimism, with the S&P 500 marking its sixth consecutive gain.
Still, General Motors announced it would suspend its annual forecast and delay its earnings call due to lingering uncertainties around tariffs.
Trump’s administration has vowed to finalize 90 trade deals in 90 days, aiming to reshape global commerce to favor American industries. Business leaders continue to push for steady cooperation to safeguard supply chains and maintain competitiveness.
