Trump to sign executive order easing auto tariffs

By Elisabeth Buchwald and Chris Isidore, CNN

New York (CNN) — President Donald Trump is set to sign an executive order on Tuesday to​ ease auto tariffs, White House press secretary Karoline Leavitt announced, the latest abrupt shift in a rapidly changing tariff policy that has left businesses scrambling to keep up.

“President Trump has had meetings with both domestic and foreign auto producers, and he’s committed to bringing back auto production to the US,” Treasury Secretary Scott Bessent said on Tuesday, speaking alongside Leavitt. “So we want to give the automakers a path to do that quickly, efficiently and create as many jobs as possible.”

Leavitt and Bessent offered scant details of what the forthcoming executive order could include. “I can tell you that it will go substantially toward reshoring American auto manufacturing,” Bessent said.

While automakers said they welcomed the reprieve, Trump’s rapid changes in tariff policy in just his first 100 days have stoked uncertainty and economic anxiety among business leaders, investors and ordinary Americans alike.

The Wall Street Journal reported Monday that Trump is set to announce a new tariff structure for cars that avoids stacking tariffs on top of other import taxes already in place. Currently, there’s a 25% tariff on almost all imported cars as well as 25% tariffs on steel and aluminum, two metals heavily used in cars.

“This deal is a major victory for the President’s trade policy by rewarding companies who manufacture domestically, while providing runway to manufacturers who have expressed their commitment to invest in America and expand their domestic manufacturing,” Commerce Secretary Howard Lutnick said in a statement to CNN on Monday.

The executive order set to be unveiled later Tuesday comes as Trump is scheduled to travel to Michigan, the heart of the American automobile industry, to mark the first 100 days of his second term in the White House.

Automakers, dealers and car buyers have been bracing for the impact of tariffs, which could upend the market for car purchases in the coming weeks.

Experts say the 25% tariff could raise the cost to build or import cars by thousands of dollars each, as well as reduce the supply of vehicles available for sale. And with the administration also planning to put tariffs on auto parts as soon as Saturday, that could raise the price of cars even higher since all vehicles built in the US contain some imported parts.

The auto industry, including carmakers and dealers, has been lobbying for relief from the levies, saying the import taxes will have a big-size impact on Americans’ finances and snarl their own supply chains.

“We’re grateful to President Trump for his support of the US automotive industry and the millions of Americans who depend on us,” General Motors’ CEO Mary Barra said in a statement on Monday.

“We believe the President’s leadership is helping level the playing field for companies like GM and allowing us to invest even more in the US economy. We appreciate the productive conversations with the President and his Administration and look forward to continuing to work together,” she said.

But GM said it is no longer standing behind its guidance for improved profits in 2025, and it delayed plans to discuss its first-quarter earnings and its outlook, originally scheduled for Tuesday morning. GM now plans to announce those Thursday so it can assess the impact of the Trump administration’s decision on tariffs. The previous guidance did not take into account the impact of tariffs.

“Given the evolving nature of the situation, we believe the future impact of tariffs could be significant, so we are reassessing our guidance and look forward to sharing more when we have greater clarity,” CFO Paul Jacobson told reporters Monday evening.

General Motors builds more than a third of the cars it assembles in North America in Mexico or Canada, according to data S&P Global Mobility. It has increased production of its large pickup trucks, the Chevrolet Silverado and GMC Sierra, at its Fort Wayne, Indiana, factory by about 1,000 vehicles a week since the tariffs were announced.

But the company says that increased production is to meet additional customer demand – it’s not shifting production away from Canada and Mexico, where it also builds those trucks. And 50% or more of the content of cars it building in the United States comes from imported parts, according to government data.

Shares of GM (GM) were down more than 1% Tuesday morning. Meanwhile, shares of other automakers, including Ford (F), Toyota (TM), Stellantis (STLA) and Honda (HMC) were trading higher.

Like GM, Ford and Stellantis thanked Trump for the softer stance on auto tariffs.

“Ford welcomes and appreciates these decisions by President Trump, which will help mitigate the impact of tariffs on automakers, suppliers and consumers,” Ford said Tuesday in a statement to CNN. “We will continue to work closely with the administration in support of the president’s vision for a healthy and growing auto industry in America.”

“Stellantis appreciates the tariff relief measures decided by President Trump,” the company’s chairman, John Elkann, told CNN in a statement on Tuesday. “While we further assess the impact of the tariff policies on our North American operations, we look forward to our continued collaboration with the US Administration to strengthen a competitive American auto industry and stimulate exports.”

Stellantis is scheduled to report its first-quarter earnings on Wednesday, while Ford is set report its earnings on Monday.

Exemptions needed

Last week, a coalition of US and international automakers wrote a letter to the Trump administration asking for relief from the tariffs, similar to exemptions already granted to semiconductors and consumer electronics.

“Tariffs on auto parts will scramble the global automotive supply chain and set off a domino effect that will lead to higher auto prices for consumers, lower sales at dealerships and will make servicing and repairing vehicles both more expensive and less predictable,” it said.

“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,” it added.

The auto industry has been rocked over the past few weeks with the slew of new tariffs. The pain is set to deepen this weekend with an additional 25% tariff on most imported auto parts taking effect. Citing people familiar with the matter, the WSJ reported that those rates could be markedly lower.

Taken together, any auto tariff changes would be retroactive, allowing automakers to be refunded for prior tariffs paid that would no longer be in effect, according to the WSJ.

However, Trump has reversed course on tariff policies many times, meaning any new changes he makes could easily be altered.

The New York Times has separately reported that automakers will be reimbursed for some of the cost of tariffs on imported components. The reimbursement will amount to up to 3.75% of the value of a new car in the first year, but will be phased out over two years, it quoted a White House spokesman as saying.

Earlier in April, Trump told reporters that he was open to exempting some automakers from tariffs in order to give them more time to build up their manufacturing facilities in the US.

This story has been updated with additional reporting and context.

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