Trump signs an order expanding exemption from customs duties on cars
President Trump signed a proclamation on Friday aimed at offsetting the impact of auto tariffs by expanding credits to eligible auto manufacturers.
Automakers that import auto parts into the United States will receive compensation of 3.75 percent of a vehicle’s listed retail price through 2030 under Friday’s order. Originally, the program was scheduled to expire in 2027.
The White House said that this percentage reflects the expected tax when a 25% tariff is applied to 15% of the value of the vehicle assembled in the United States.
Friday’s executive order also imposed a 10 percent tariff on bus imports and implemented new 25 percent tariffs on imported medium and heavy trucks starting November 1.
This move from the White House comes after automakers announced expected losses of about $1 billion from the Trump administration’s new trade policies earlier this year. Lobbyists have pushed for relief amid the changes.
In April, Trump issued an executive order protecting manufacturers from being hit twice by the president’s auto tariffs.
“The idea here is we want to incentivize domestic vehicle manufacturing, and one way to do that is to say that, well, if we understand that 100% of the vehicle can’t be used with goods that are already here in the United States,” a senior administration official said Friday.
“And for the parts that need to be imported, we basically allow credit so that they can offset any customs liability that they may accrue, because they are importing parts just to manufacture them here in the United States,” the official added.
