U.S. Commerce Secretary Howard Lutnick stated that recent changes to auto sector tariffs are designed to support the expansion of manufacturing within the United States—helping create new jobs and boost local industry.
The decision follows detailed discussions between President Donald Trump and top executives from major American carmakers, which led to executive orders focused on revitalizing domestic production.
Conditional Exemptions to Support U.S. Supply Chains
Under the updated policy, automakers operating within the U.S. will receive a 15% tariff discount on imported auto parts used in local production.
Additionally, vehicles made entirely in the U.S. and containing at least 85% American-sourced components will be completely exempt from import duties.
This preferential treatment will be phased in over three years, giving manufacturers time to build reliable domestic supply chains and reduce reliance on foreign parts.
Build in America, and You Win
Lutnick emphasized the administration’s slogan: “Finish building your cars in America, and you’ll come out ahead,” highlighting the expected positive impact on the national economy.
He also explained that companies will be required to pay duties on either the finished vehicle or the steel used in production—whichever is more expensive—creating a strong incentive to localize manufacturing processes.
Responding to Industry Demands
The Secretary noted that several major automakers had explicitly requested temporary tariff relief to facilitate factory expansions and job creation.
This move is part of a broader strategy to reshore industrial operations and reinforce the country’s economic and manufacturing security in response to global uncertainties.
