The White House on Friday said it would extend current tariff relief programs for some of the country’s largest automakers. The Trump administration also laid out the details of promised tariffs on heavy trucks and buses.
In late April, President Donald Trump signed an executive order to prevent automobile and auto parts tariffs from stacking on top of each other, which could add up quickly for North American automakers.
Trump’s order also gave automakers relief from separate tariffs that he applied to steel and aluminum products. The latest announcement will extend a tariff offset program from two years to five.
“The priority is to expand domestic vehicle production in the United States to ensure that we have good, high-paying jobs for American workers,” a senior administration official said Friday.
Automakers often assemble some parts of a vehicle or key components in Mexico or Canada, and then import the unfinished pieces to the U.S. to be completed. Those components and parts can cross the border multiple times, racking up multiple rounds of tariffs.
Friday’s announcement came after months of lobbying from the auto industry and underscores how the Trump administration’s trade overhaul is still evolving after six months, and still sensitive to industry pressure.
Ford CEO Jim Farley told analysts on the company’s earnings conference call in July that the company’s aim is to “simplify the tariffs.”
Ford makes more vehicles in the U.S. than any of the other “big three” manufacturers. Even still, Ford expects a tariff bill of about $2 billion for the full year.
“We see there’s a lot of upside depending on how the negotiation goes with the administration. We’re in daily contact with them and, at this point, I would say they’re very productive conversations,” Farley said in July.
The White House appeared to have heard the industry’s concerns loud and clear.
“We designed this program to allow automakers who are building things here, like the president wants, that are making their vehicles here with American labor … are able to continue to be cost competitive and expand production,” a senior administration official told reporters Friday.
Meanwhile, the president announced in late September that he planned to impose a 25% import tariff on “all ‘heavy (big!) trucks’ made in other parts of the world” starting Oct. 1.
But that date passed without any formal announcement. Trump later issued another Truth saying that he would impose the tariff starting Nov. 1. The president today signed an executive order to begin implementing those tariffs on that timeline.
The White House also said on Friday that it would impose a 10% tariff on imports of buses, including school buses, motor coaches and similar vehicles starting Nov. 1. Imports from Mexico and Canada would receive “USMCA-favorable treatment,” similar to the treatment that auto imports receive.
While the White House plans to extend the auto tariff offsets through the end of Trump’s second term, it is also working on ways to lure companies — both foreign and domestic — to move overseas production to the United States.
“We are also creating an import adjustment offset program for automobile and truck engine manufacturers and this program is designed to reward companies that make their engines in the United States,” the senior official told reporters.
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