[SMM Analysis] Between Advancement and Retreat: Pragmatic Compromise in the US Auto Tariff Compensation Policy and the Challenge of Global Industry Chain Restructuring

US President Trump signed a proclamation on the 29th, allowing a certain degree of compensation for imported auto parts and automakers assembling vehicles in the US. This latest move reflects the ongoing opposition from various sectors in the US to the government's tariff policies, increasing pressure on the administration. According to the proclamation, this compensation is intended to offset part of the tariffs on auto parts assembled in the US, with the maximum compensation amount reaching up to 3.75% of the vehicle's retail price. This compensation cap will decrease to 2.5% of the vehicle's retail price in the second year. The 25% import tariff on automobiles (including new energy vehicles) effective from April 3, 2025, and the proposed 25% tariff on critical parts effective from May 3, 2025, form the core measures of US trade protectionism. A 100% tariff (previously 25%) is imposed on Chinese electric vehicles (EVs). Specific tariff data is shown in Chart-

. The April 29 proclamation allows domestic automakers to apply for tariff compensation: 2025: Maximum compensation of 3.75% of the vehicle's retail price (25% tariff × 15% calculation ratio) 2026: Compensation cap reduced to 2.5% (25% × 10%), fully canceled in 2027 Retroactive to April 3, 2025, paid tariffs can be refunded.

This move provides domestic automakers with short-term relief, but long-term pressure remains unmitigated. The compensation mechanism alleviates about 3-5% of the cost pressure for domestic automakers, but the 25% base tariff persists. Exports of Chinese new energy vehicles to the US have nearly halted, and "circuitous exports" via Mexico and Southeast Asia are still restricted by new US customs regulations. Additionally, the compensation mechanism contradicts the original intent of the tariffs, aiming to protect domestic manufacturing while imposing high import tariffs, yet relying on imported parts to maintain production, necessitating compensation for vehicles and essential parts.
This policy adjustment represents a compromise between protectionism and industrial reality in the US, providing short-term relief for automakers without altering the essence of the trade war. The global new energy industry chain will further exhibit "regionalization + multipolarization," with the core imbalance remaining the competition between technological barriers and cost control.

SMM New Energy Industry Research Department

Cong Wang 021-51666838

Rui Ma 021-51595780

Disheng Feng 021-51666714

Yanlin Lyu 021-20707875

Zhicheng Zhou 021-51666711

Haohan Zhang 021-51666752

Zihan Wang 021-51666914

Jie Wang 021-51595902

Yang Xu 021-51666760

Bolin Chen 021-51666836