Will Auto Tariff Exemptions Be Coming? U.S. Government Official Forecasts: Trump Will Take Action on Tuesday!

According to media reports, US officials stated on Monday that the Trump administration will take action on Tuesday to mitigate the impact of its auto tariffs by reducing some tariffs on foreign parts used in domestically manufactured cars and ensuring that tariffs on foreign-made cars do not compound with existing tariffs.

"President Trump is building an important partnership with domestic automakers and our great American workers," US Commerce Secretary Howard Lutnick said in a statement.

"This agreement is a major victory for the president's trade policy, rewarding companies that produce domestically while also providing growth opportunities for manufacturers committed to investing and expanding production in the US."

Amid market turbulence and intense lobbying from the auto industry, mitigating the impact of auto tariffs marks the latest rollback in President Trump's trade policy.Earlier this month, Trump announced a 90-day pause on his recently introduced "reciprocal tariff" policy.

US automakers stated earlier on Monday that they expect Trump to announce auto tariff relief before his visit to Michigan, home to Detroit's three major automakers and over 1,000 key auto suppliers. Trump will hold a rally in Michigan to mark his 100th day in office.

Facing impending tariffs on auto parts, six major organizations representing the US auto industry unusually united last week to lobby the Trump administration against imposing these tariffs, warning that they would raise car prices and hurt auto sales.

These organizations represent franchised dealers, suppliers, and nearly all major automakers. In a letter to Trump administration officials, they stated that the impending tariffs could jeopardize US auto production. The letter noted that many auto suppliers are already "struggling" and cannot afford additional cost increases, leading to broader industry issues.

"Most auto suppliers are unable to handle the chaos caused by sudden tariff hikes. Many suppliers are already struggling and will face shutdowns, layoffs, and bankruptcies," the letter stated. "Just one supplier's failure can halt an automaker's production line. When this happens—as it did during the pandemic—all suppliers are affected, and workers lose their jobs."

At month-end, Trump signed an executive order imposing a 25% tariff on imported cars, effective April 3, with plans to impose a 25% tariff on auto parts starting May 3.

On the 14th of this month, Trump stated that he is considering granting US automakers exemptions from tariffs on imported parts to help them transition to producing parts domestically. He noted that automakers need time to produce in the US and is considering measures to help them adjust their supply chains.

The White House confirmed last Wednesday that Trump is considering exempting automakers from some of the harshest tariffs. Additionally, media reports indicated that Trump plans to exempt some tariffs on auto parts, including those on imported steel and aluminum products.