Donald Trump facilitates car rates to prevent price increases, job losses and plant closures | Today news

US President Donald Trump signed an executive order on Tuesday (April 29) to facilitate the impact of his car rates, responding to lobby work of car manufacturers, parts suppliers and car dealers. The move comes after warnings that excessive levies can lead to higher car prices, plants of plants and job losses in the US automotive industry. Trump’s decision to soften the battle of the rates provides a postponement for the industry, whereby car manufacturers can have a breathing room to address their concerns. “I have now determined that these rates, to the extent that these rates apply to the same article, should not all have a cumulative effect (or” stack “above each other),” Trump explained in the executive order. He emphasized that the stack rates on top of each other could exceed the necessary rate to achieve the proposed policy objective. Important provisions of the executive order under the new order, imported cars, will no longer face additional rates on aluminum and steel, preventing several rates from being imposed on the same product. The change is aimed at alleviating the economic pressure on car manufacturers. Trump also adjusted the 25% tariffs to auto parts, which would come into effect on May 3. The new plan allows car manufacturers who manufacture and sell finished cars in the US to claim an offset worth up to 3.75% of the value of a domestic vehicle. This offset will drop to 2.5% in one year and eliminated the following year, in an effort to encourage domestic manufacturing. This relief applies to cars produced after April 3. The executive order was released before Trump’s visit to Michigan, an important state for the automotive industry. Business reactions The decision comes after weeks of lobbying by the automotive industry, which expressed concern that Trump’s original rates could disrupt the North American production network between the US, Canada and Mexico. Car manufacturers were particularly concerned that tariffs would raise thousands of dollars by thousands of dollars and impede supply chain. In Michigan, Trump said the move was designed to give the automotive industry “a little relief”, especially as companies work to bring more manufacturing back to the US. “We just wanted to help them … if they can’t get parts, we didn’t want to punish them,” he said. Trump’s continued tariff flexibility amid economic problems, this step is part of Trump’s broader strategy to show flexibility over his trade policies, which has caused economic uncertainty. The decision to mitigate car rates is seen as a response to the growing concern about possible economic slowdown and inflation. In a recent Reuters/Ipsos poll, it was revealed that only 36% of Americans approve the economic stewardship of Trump, the lowest approval rating during its current term. The impact of rates on the global economy of Trump’s aggressive trade policies, especially its foreign goods rates, has reproduced across the global economy. The financial markets have responded negatively to the uncertainty generated by the rates, causing the fear of a possible recession and further inflationary pressure. The administration’s decision to mitigate the impact on the automotive industry is a strategic shift to manage the ongoing consequences of these trade policies. The shift in the tariff policy comes as Trump continues to navigate complicated trade relations, and its goals to reform the manufacture of manufacturing and protect US workers with the realities of economic pressure on the automotive industry. First published: 30 Apr 2025, 03:07 AM IST