Report: Auto Tariffs Will Be Tamped Down After Heavy Lobbying From Detroit

The White House appears ready to extend tariff relief for the U.S. auto industry—the plan involves a five-year extension of a previously carved out provision allowing automakers to reduce the tariffs they pay on imported car parts.

According to a report from Bloomberg, the Commerce Department will announce an extension to the arrangement in the coming days—potentially even as early as later today. The original carve-out was expected to last just two years.

If implemented as expected, the extension will allow manufacturers to claim “offsets” against Section 232 tariffs on parts, based on how many vehicles they assemble domestically. Under the current rules, automakers may receive an import adjustment offset equal to 3.75 percent of the MSRP value of eligible U.S.–assembled vehicles in the first year and 2.5 percent in the second year.

The policy change should arrive alongside documents that formally introduce tariffs on imported trucks.

The five-year concession follows heavy lobbying from Detroit automakers frustrated by the higher cost of tariffs on imported vehicles, auto parts, steel, and aluminum. Of course, much of their frustration stems from how they have structured their operations in recent years to maximize margins.

Ford, GM, and others argue that the tariff burden—on parts, steel, aluminum, and finished imports—threatens their competitiveness and margins. Ford, in particular, has been critical of the concessions given to Japan, which the automaker claims hand Toyota a competitive edge due to the nation’s lower labor and currency costs. Under the U.S.-Japan deal, tariffs on auto imports dropped from 27.5% to 15%, creating a cost advantage that could be worth thousands per vehicle.

While the offset mechanism eases some pressure, it does not eliminate the tariffs. Automakers still face the full 25% duty on imported parts—the offset simply reduces the net burden for those who qualify.

[Images: Stellantis]

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