April 29 (UPI) — President Donald Trump has made a deal that restructures auto tariffs, U.S. Commerce Secretary Howard Lutnick said.
Lutnick said Monday that Trump will announce a reorganization of tariffs on cars, which will reportedly keep the levies from stacking on top of already existing duties. The current tariff puts a 25% duty on most imported cars, as well as metals such as steel and aluminum, which are both commonly used in auto making.
Details of how the deal was reached or who it’s with have yet to be announced, but the confirmation of an agreement arrived a day before Trump is to speak about his first 100 days in office in Macomb County, Mich.
Trump has said the tariffs levied on cars would increase American production and create jobs, as well as build revenues, lower taxes and help lower the national debt. However, warnings of how the levies could disrupt the supply chain and raise prices for consumers have come from both the auto industry and other analysts, who instead have asked for deals to be made that lean on stability and defined parameters.
A letter from the Alliance for Automotive Innovation and five other of the auto industry’s larger lobbying groups sent to Lutnick’s office as well as to the U.S. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer asked the Trump administration to reconsider the tariffs on auto parts, and said that most “auto suppliers are not capitalized for an abrupt tariff induced disruption.”
“Many are already in distress and will face production stoppages, layoffs and bankruptcy,” the letter read.
The nonprofit Center for Automotive Research has concluded that a “uniform 25% tariff on all trading partners” would result in an increased cost of $107.7 billion to all U.S. automakers, $41.9 billion to the D3, or Big Three Detroit-based auto makers General Motors, Ford Motor and Stellantis, and would impact the D3 production volume of 6.8 million vehicles.
Trump has indicated an openness to reconsidering the administration’s 25% tariffs on imported automotive parts, despite an earlier opinion that tariffs on imported vehicles and auto parts would pressure auto businesses to restore their U.S. manufacturing presence.
The MichAuto association, which works under a mission statement to “promote, retain, and grow Michigan’s signature industry,” reports that as of 2022, 27% of Michigan’s gross state product was tied to the automotive industry, as are over 1.2 million jobs.
