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FinanceTariffs

Trump will sign an executive order softening the tariff impact for automakers

By
Chris Morris
Chris Morris
Former Contributing Writer
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By
Chris Morris
Chris Morris
Former Contributing Writer
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April 29, 2025, 11:57 AM ET
Trump will provide some tariff shelter for automakers.
Trump will provide some tariff shelter for automakers.Anna Barclay/Getty Images
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  • Trump will sign an executive order regarding auto tariffs Tuesday afternoon. The agreement is expected to prevent tariffs from “stacking,” which would benefit manufacturers. Consumers will still see price increases, though.

The auto industry can breathe a little easier when it comes to tariffs.

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President Trump plans to sign an executive order that will give car and truck manufacturers some relief from import tariffs, amid fears those levies would impact U.S. factories.

While the 25% tariffs will remain in place on imported vehicles and auto parts, they will be modified to ensure they don’t “stack” on top of other tariffs, such as those on aluminum or steel. Automakers will not have to pay tariffs on those widely used products.

At the same time, automakers will be reimbursed for some of the cost of tariffs on some imported auto parts. That compensation will work out to 3.75% of the value of a U.S.-made car for the first year, 2.5% of the value for the second year, then it will be phased out, according to a report in the Wall Street Journal.

White House press secretary Karoline Leavitt said at a Tuesday briefing that Trump will sign an order regarding auto tariffs later this afternoon before he travels to Michigan for a rally observing his first 100 days in office. She did not go into detail about the order, however.

The 25% tariff on imported cars took effect April 3. The tariff on imported parts is scheduled to go into effect on Saturday, May 3.

The auto industry has been lobbying the Trump administration for relief on tariffs for weeks. In a letter to the White House, a collection of lobbyists, including the Alliance for Automotive Innovation, wrote that Trump “has indicated an openness to reconsidering the administration’s 25 percent tariffs on imported automotive parts—similar to the tariff relief recently approved for consumer electronics and semiconductors. That would be a positive development and welcome relief.”

Even with the block on tariff stacking, consumers can expect to pay thousands of dollars more for new and used cars in the coming months. Repair costs and insurance premiums will also likely increase.

About the Author
By Chris MorrisFormer Contributing Writer

Chris Morris is a former contributing writer at Fortune, covering everything from general business news to the video game and theme park industries.

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