President Donald Trump is set to offer relief to major automotive manufacturers in response to tariffs on the import of cars from abroad.
The President initially launched a flat 25 per cent tariff on car imports and vehicle parts to the United States on April 2, which sent shockwaves across the industry.
Donald Trump said this would lead to "tremendous growth" and mark "Liberation Day" to boost manufacturing in the United States.
However, the President now looks set to ease the impact of tariffs on manufacturers by giving them two years to rework their supply chains.
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President Donald Trump has eased some auto tariffs to help manufacturers adjust
REUTERS/GETTY
White House officials suggested that car parts made in Canada and Mexico that follow North American free trade rules would avoid any tariffs.
Speaking on the lawn of the White House earlier today, Trump said: "We just wanted to help [the manufacturers] during this little transition, short term.
"If they can't get parts, and it has to do with a very small percentage, we didn't want to penalise them.
"In some cases, they can't get the parts fast enough, so this is just a little transition. It's 15 per cent for one year, and just 10 per cent for another."
He added that it would only apply to a percentage of parts on the car, but would benefit those "doing a great job".
Reports suggest carmakers could receive credits for up to 15 per cent of the value of vehicles assembled domestically, which could be applied against the value of imported parts.
Scott Bessent, Secretary of the Treasury, also told Fox News that Trump wants to make the US the best destination for automotive manufacturing.
He added that a tax deal will make automotive loans for US-made cars deductible in a further boost to manufacturing.
Posting on social media site Truth Social, the Republican President published a glossy campaign video highlighting the benefits coming from the introduction of his tariffs.
Donald Trump is expected to hold a rally in the automotive manufacturing hub of Michigan today, which is the home state for the Detroit Three - Ford, General Motors and Stellantis.
Major brands have been working to manage the impact of the tariffs by amending their output, changing production schedules and launching dialogue with the Trump Administration.
Reuters reported that CEOs and senior executives from Hyundai and Toyota, as well as Nvidia and other major companies, will meet Trump at the White House for an event highlighting US investment.
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