The US administration has announced plans to reduce the impact of its tariffs on US carmakers by easing some duties on foreign vehicle parts.
Partnership between US carmakers and workers
The commerce secretary, Howard Lutnick, said: “President Trump is building an important partnership with domestic automakers and our great American workers.
“This deal is a major victory for the president’s trade policy by rewarding companies who manufacture domestically, while providing a runway to manufacturers who have expressed their commitment to invest in America and expand their domestic manufacturing.”
As a result, car manufacturers paying tariffs will not be charged other levies such as those on steel and aluminium, according to the Wall Street Journal. Carmakers will be able to get a reimbursement for tariffs on imported car parts based on the value of the vehicle.
Lobbying by the US car industry
Last week, a group of US car industry companies, including GM, Toyota, Volkswagen and Hyundai, asked President Trump in a letter not to impose 25% tariffs on imported car parts, warning that the levy would kill sales and raise prices, hurting the American consumer.
The letter said: “Tariffs on auto parts will scramble the global automotive supply chain and set off a domino effect that will lead to higher auto prices for consumers, lower sales for dealerships and will make servicing and repairing vehicles both more expensive and less predictable.”
GM chief executive Mary Barra and Ford boss Jim Farley praised the White House for adjusting the tariffs.
“We believe the president’s leadership is helping level the playing field for companies like GM and allowing us to invest even more in the US economy,” Barra said.
Farley said the changes “will help mitigate the impact of tariffs on automakers, suppliers and consumers.”
Viewpoint
This is a good move by the Trump administration and coincides with his trip to Michigan, the motor city and home to more than 1,000 carmakers.
The move may also give a fillip to his 100-day approval ratings, which CNN reports are lower than any president in at least seven decades at 41%.
This is a shrewd move by Trump, whose platform to put America first will be the measure by which voters will stay with him. For more updates on international developments, visit our World Affairs section.
However, with 86% of Republicans approving his approach, unless the Democrats can put together any semblance of an opposition, Trump’s loyal following will stick with him regardless of the pain.
