WASHINGTON, United States (US): Carmakers in the US are to receive relief from tariffs on components, according to a Department of Commerce senior official on Tuesday, reported German Press Agency (dpa).
“We just wanted to help them during this little transition,” US President, Donald J. Trump, said.
But “basically, they’re paying 25 per cent”, he said of the carmakers.
White House spokeswoman, Karoline Leavitt, earlier said Trump would sign decrees on car tariffs in the course of the day, after industry complaints.
The exemptions are to mitigate duties on imported components for assembly in the US, according to reports.
The Department of Commerce official confirmed that the additional tariffs on aluminium and steel would not apply to car parts, in order to avoid a double burden.
The regulation should also apply to foreign car manufacturers in the US, the official said, citing BMW with its factory in the state of South Carolina and Mercedes in the state of Alabama as examples.
German carmakers’ US plants are dependent on imports from third countries.
German companies also export large quantities of car parts to the US, both as supplies for US carmakers and for the US plants of German carmakers.
A transitional phase is now planned for the 25 per cent tariffs on components, according to the Department of Commerce.
Manufacturers are to be reimbursed up to 3.75 per cent of the value of a vehicle built in the US in the first year.
It would fall to 2.5 per cent in the second year, and from the third year onwards, the spokesperson said, the tariffs would end.
Trump had announced 25 per cent tariffs on imported cars and components.
The duty on finished cars came into force at the beginning of April, with the duty on parts to follow on May 3.
Treasury Secretary, Scott Bessent, said at a White House press conference that the relief would be a significant boost for US car production.
The step follows warnings from the industry that otherwise, there could be drastic negative impacts and major price increases.
Market researchers estimate that around half of the vehicles sold in the US are assembled outside the country.
Even US manufacturers produce many cars abroad, in Mexico.
Some estimates suggest only 40 per cent to 50 per cent of vehicles built in the US are actually made there. -BERNAMA-dpa
