President Trump signed a few executive orders on Tuesday, in which some tariffs have decreased for car manufacturers and levies that Ford, General Motors and others complained in the US production by increasing production costs and pressing their profits.
The changes will change the tariffs of Mr. Trump so that automobile manufacturers who pay a tariff of 25 percent for car imports are not subject to other levies, for example for steel and aluminum or for certain imports from Canada and Mexico in accordance with the orders. However, the rules do not seem to protect the car manufacturers from tariffs for steel and aluminum who pay and pass on their suppliers.
Car manufacturers can also qualify for a part of the costs of their imported components for a tariff aid, although these advantages are triggered in the next two years.
On Tuesday evening in Michigan, Mr. Trump said that he showed the car manufacturers “a little flexibility”, but that they should produce their components in the USA.
“We gave them a little time before we slaughter them if they didn’t,” he said.
The decision to reduce the scope of tariffs is the latest sign that the Trump government’s decision to impose stiff taxes on almost all trading partners represents challenges and economic uncertainties for American companies. Despite the concessions announced on Tuesday, the administrative guidelines will give thousands of dollars at the prices for the automobiles and endanger the financial health of car manufacturers and their suppliers, according to analysts.
Mr. Trump signed the Executive Orders on board the Air Force One when he flew to Michigan, the largest car manufacturers in America, for a speech that marked its 100 days in office.
The car manufacturers have welcomed any relaxation of tariffs that, according to cars, increase prices, decrease sales and endanger their financial viability. However, the steps will enable a tariff of 25 percent for imported vehicles that came into force on April 3, and a tariff for car parts that comes into force on Saturday. This still increases prices for new and used cars by thousands of dollars and increases the costs for repairs and insurance premiums.
On Tuesday, General Motors gave up an earlier forecast for solid profit growth as a result of the uncertainty this year, which was created by Mr. Trump’s trade policy. The car manufacturer, which sells more vehicles in the USA than any other company, said that every profit forecast was a “assumption”.
“The previous instructions cannot be based,” said Paul Jacobson, Chief Financial Officer from GM, during a conference call with reporters.
The car manufacturer has also postponed a telephone conference with financial analysts to discuss the results of the first quarter, and referred to the expected change in the Trump management tariff policy. The company will now hold the call on Thursday.
The move comes just a few weeks after the administration Freeds smartphones, computers, semiconductors and other electronics From the punishments of China to concerns from companies such as Apple that import taxes would make prices for US consumers to drink.
On Tuesday, Howard Lutnick, the Commercial Secretary, said that the changes from direct conversations with domestic car manufacturers are due and that the administration in “constant contact” with the companies to analyze their business and ensure that they understood exactly.
“Donald Trump and his presidency will bring back domestic car production,” said Lutnick.
The Trump government has not admitted that the tariffs will violate car manufacturers. But on Tuesday it seemed to be recognized that it would help them win the tariffs back. In an order signed on Tuesday, the president said that the changes would help to reduce the trust of the industry into foreign production and to encourage companies to expand their domestic production.
For one year, the administration will offer car manufacturers an exception to their auto parts for 15 percent of the manufacturer’s sales price for an automobile compiled in the USA. That would drop to 10 percent in the second year and then be eliminated in the third year.
Car manufacturers that put together cars in the USA can apply for this so -called offset by submitting documents to the government through its planned imports and tariff costs.
In a second arrangement of the executive, Mr. Trump described new rules that are freed from companies that pay a kind of tariff when they pay others. The president said that the tariffs, when an import was exposed to several types of tariffs, should not “stack” on top of each other because the resulting tariffs were higher than necessary.
The order states that the car manufacturers would pay a tariff of 25 percent for cars and auto parts that would not be subject to the tariffs that Mr. Trump had placed on steel and aluminum or import from Canada and Mexico.
Products that are subject to the tariffs for imports from Canada and Mexico will no longer be subject to tariffs for steel and aluminum, according to the order. But it said that there were still tariffs for aluminum content.
Further tasks will continue to be charged for all objects, including the tariffs that Mr. Trump have imposed on China and the tariffs imposed on trade injuries such as dumping and unfair subsidy.
The latest rules also allow an exception for parts that have been imported from Canada and Mexico that correspond to a contract that Mr. Trump negotiated during his first term. Both countries are important suppliers of the US auto industry.
The liberation buys for some time with car manufacturers, said Lenny Larocca, US automotive industry manager of the consulting company KPMG. “There is a little time to find out what your strategy could be,” he said.
However, car manufacturers and suppliers say that two years are not enough time to reorganize their manufacturing companies. Even if you do this, you cannot produce many components in the United States as cheap as you do elsewhere, which will lead to higher prices.
Even cars that were manufactured in the USA usually use far more imported parts than by liberation. Most cars also contain components from Japan, South Korea or China, which are subject to tariffs.
“The long -term challenge is not today,” said Bernstein analysts in a note on Tuesday. “The US car prices are as high as economic dynamics.”
Nevertheless, Auto -Manager thanked the fact that Mr. Trump had at least spoken to some of her concerns. In a statement on Monday, Mary T. Barra, the managing director of GM, said the company “Productive Talks with the President and his administration” said.
“The management of the president helps to eliminate the competitive conditions for companies such as GM and to invest even more in the US economy,” she said.
“Stellantis estimates the tariff assistance measures decided by President Trump,” said John Elkann, chairman of the company, the Dodge, Jeep, Ram and Chrysler. “While we are further evaluating the effects of collective bargaining policy on our North American operations, we look forward to our continued cooperation with the US government in order to strengthen a competitive American auto industry and to promote exports.”
The managers also pointed out that they hoped that the continued discussions with administrative officials would lead to further concessions. “We will continue to work closely with the administration to support the president’s vision for a healthy and growing auto industry in America,” said Jim Farley, Managing Director of Ford.
The exemption seems to have been partially equipped by Mr. Lutnick played a role When securing lucrative exceptions for some industries in recent months. In a statement on Monday, he described the deal “a great victory for the president’s trade policy” and said that it would “express their commitment to investing in America”.
Veronique de Rugy, a senior research fellow with the Mercatus Center, described the move from the Trump administration as a “shakedown” and said that car manufacturers have imposed pain and then asked for promises from investments.
“The Trump tariffs have created a crisis for car manufacturers, and now the administration is partly relieving,” she said.
Neal e. Boulder And Tony Rump Reported reports.
