Trump's Executive Order to Reimburse 3.75% of Tariffs on U.S. Car Production

President Donald Trump is preparing to sign an executive order that aims to alleviate the impact of tariffs on the U.S. automotive industry. This action is part of a larger economic plan to bolster domestic manufacturing while addressing the financial strain caused by tariffs on imported auto parts and vehicles.

The executive order will offer automakers a partial reimbursement for tariffs on imported auto parts, calculated based on the value of their U.S. car production. This reimbursement will gradually decrease over two years, with automakers eligible to receive up to 3.75% of the value of a new car. Furthermore, the order will prevent the "stacking" of tariffs, ensuring that automakers do not have to pay the 25% tariffs on steel and aluminum in addition to the existing tariffs on cars and parts.

Commerce Secretary Howard Lutnick highlighted that the new trade policy is intended to incentivize companies that manufacture domestically while providing support to manufacturers committed to investing in the U.S. This initiative is anticipated to stimulate car manufacturing in the country. However, some analysts predict that prices for both new and used cars, as well as repair costs and insurance premiums, may still increase.

The 25% tariff on imported vehicles has been in effect since the beginning of the month, and the tariff on imported components will take effect on May 3. President Trump is scheduled to visit Warren, Michigan, to announce these changes, emphasizing the administration's commitment to supporting the automotive industry and domestic manufacturing.