April 30 (UPI) — President Donald Trump signed a pair of executive orders on Tuesday to ease his tariffs targeting automobile and auto part imports, marking another drastic reversal of his tariff policy amid domestic industry concerns.
The executive orders modify the 25% tariffs imposed earlier this month on automobile imports by removing additional tariffs that Trump had imposed on imported aluminum and steel. They will reduce the 25% tariff to go into effect this weekend on auto part imports used by domestic manufacturers, provided the vehicle contains at least 50% American-made parts or parts subject to the U.S.-Mexico-Canada Agreement.
The announcement comes a week after a coalition of U.S. and international carmakers — from General Motors to Hyundai — sent the White House a letter warning that tariffs on auto parts would “set off a domino effect” leading to higher prices, lower dealership sales, increased costs of servicing and repairing vehicles and, inevitably, layoffs.
“Most auto suppliers are not capitalized for an abrupt tariff-induced disruption,” the coalition said in the letter, the Detroit Free Press reported. “Many are already in distress and will face production stoppages, layoffs and bankruptcy.”
“It only takes the failure of one supplier to lead to a shutdown of an automaker’s production line,” it added.
Recent analysis from the Center for Automotive Research shows that Trump’s uniform 25% tariffs on the auto industry would increase costs for all U.S. automakers by $107.7 billion.
Trump has argued that the tariffs will force automakers to pursue domestic production of vehicles, either by increasing the manufacturing of parts stateside and to encourage international automakers to build factories in the United States.
During a rally in Warren, Mich., on Tuesday, Trump said he “proudly imposed” a 25% tariff on all foreign-made automobiles and that “this is going to create more jobs in this state and this country.”
He described the tariff easing as “help” to bring their factories to the United States “as rapidly as possible.”
“I’m giving them a little bit of a break,” he said. “They took in parts from all over the world. I don’t want that. I want them to make their parts here. But I gave them a little bit of time.”
In anticipation of being accused of flip-flopping, Trump said, “It’s called a little flexibility.”
“We give them a little bit of time before we slaughter them if they don’t,” he said.
