President Donald Trump has signed a pair of executive orders softening the impact of his latest automotive tariffs, granting U.S. carmakers more time to increase the domestic content in vehicles assembled in the United States. The move comes just days before a 25% tariff on imported components was set to take effect.
Under the revised measures, carmakers will be allowed to offset tariffs for imported parts equal to 3.75% of a vehicle’s Manufacturer’s Suggested Retail Price (MSRP) through April 2026, and 2.5% of total U.S. production through April 2027. The 25% tariff on finished vehicles imported into the U.S. remains unchanged.
Philipp Sayler von Amende, chief commercial officer at Carwow, said: “President Trump’s plan to scale back tariffs on foreign-made parts – just days before the 25% rate was due to kick in – is a welcome, last-minute reprieve for car manufacturers in the US. But it’s far from a full reset.
“The bigger issue remains: a 25% tariff still applies to cars built overseas, which continues to create pressure for UK manufacturers trying to keep British-built vehicles price-competitive for US consumers.
“The White House has framed this move as a reward for brands investing in US manufacturing – a message likely to resonate with European firms like Volvo, Audi, Mercedes-Benz and Hyundai, many of whom had already started shifting production to America to get ahead of the tariffs.
“Whether the UK secures a separate deal for a lower car tariff remains to be seen. At the same time, Washington is seeking lower tariffs on US-built vehicles coming to the UK — suggesting there’s still a lot to play for in the ongoing negotiations.
“As for UK dealers and buyers, the knock-on effects aren’t yet fully clear. But the last three weeks have highlighted just how globally interconnected the car industry is, and when financial market realities bite and intense supply chain pressure and fierce corporate lobbying converge, they can outweigh the headlines of political theatre.
“Of course, this also shows that Trump has a track record of changing course, so there’s every chance we’ll see further adjustments. A rollback to around 5% across the board would still allow the administration to claim a win – doubling the original 2.5% tariff – while allowing foreign-built cars to start flowing back into the US market by the end of May.
“But constant shifts in direction come at a cost, creating uncertainty for businesses up and down the car manufacturing supply chain. Policymakers around the world must recognise how critical long-term stability is to the automotive sector. From investment decisions to stock availability and consumer confidence, this is a global industry that needs clarity – not surprises – to thrive.”
