President Donald Trump's administration has announced measures to ease the impact of automotive tariffs, aiming to support domestic car manufacturers and workers. The new policy will reduce duties on foreign parts used in domestically assembled vehicles and avoid layering multiple tariffs, such as those on steel and aluminum. This decision, confirmed by Commerce Secretary Howard Lutnick, aligns with Trump’s trade policy of incentivizing domestic production and comes ahead of his visit to Michigan, a key auto industry hub. ​

Automakers, including General Motors and Ford, praised the move, which is expected to lower costs and provide investment incentives in U.S. manufacturing. The automotive industry had expressed strong opposition to the proposed 25% tariffs on imported parts, warning of adverse effects on prices, sales, and supply chains. Industry groups cautioned that such tariffs could disrupt the supply chain, leading to higher prices, production halts, and financial stress for suppliers.

In addition to easing tariffs, Trump has proposed tax incentives for foreign automakers willing to manufacture their vehicles in the U.S., including a reduction in the corporate tax rate from 21% to 15% for companies producing domestically. This initiative aims to attract foreign investment and bolster U.S. manufacturing.

However, financial institutions like HSBC have expressed concerns over rising trade tensions due to U.S. policies, citing increased credit losses and potential risks to global economic growth. ​

The administration's shift signals a more flexible approach to tariffs, which have previously contributed to economic uncertainty and market volatility.