President Donald Trump has signed executive orders easing his controversial 25% tariffs on automobiles and parts, aiming to relieve pressure on carmakers struggling with rising costs.
The move follows warnings from manufacturers and analysts that the tariffs could inflate prices, harm domestic production and slow the industry’s recovery. Trump framed the measure as a temporary bridge, allowing automakers time to shift more manufacturing into the US instead of facing harsh penalties.
The changes include a short-term rebate system tied to the proportion of foreign parts used in vehicles assembled domestically. Automakers have been told they’ll have two years of reduced levies, giving them time to reconfigure supply chains and invest in new US-based facilities.
Officials claim announcements on job creation and plant expansion are expected soon, with companies like Stellantis, Ford, and GM praising the policy shift as a step toward competitiveness rather than an immediate fix.
However, some experts warn that the industry needs stability instead of unpredictable policy swings. They argue that relocating production takes years and billions in investment, not mere months.
With vehicle prices already high and supply chains stretched, economists question whether the tariff adjustments can offset the broader economic risks posed by Trump’s wider trade strategy.
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