The proposal aims to cut costs for major U.S. carmakers by rewarding companies that assemble vehicles domestically, supporting Trump’s job creation goals.
US President Donald Trump is considering a major tariff relief plan aimed at boosting US auto production, according to Republican Senator Bernie Moreno and industry officials.
Moreno emphasised that the plan would reward companies assembling cars in the US, aligning with Trump’s goal of creating more American jobs. The proposal could significantly reduce costs for automakers like Ford, Toyota, Honda, Tesla, and GM, which are among the top producers of vehicles with domestic content.
“The signal to the car companies around the world is look, you have final assembly in the US, we’re going to reward you. For Ford, for Toyota, for Honda, for Tesla, for GM, those are almost in order of the top five domestic content vehicle producers – they’ll be immune to tariffs.” Moreno said in an interview.
The Commerce Department had previously announced an import adjustment offset of 3.75% of a vehicle’s suggested retail price for US-assembled cars, set to decrease to 2.5% in 2026. However, Trump is reportedly considering extending the 3.75% rate for five years and expanding it to include US engine production. This move would further incentivise automakers to shift production to the US.
In May, Trump imposed 25% tariffs on USD 460 billion worth of vehicle and auto part imports, but has since negotiated reductions with countries like Japan, the UK, and the EU.
Meanwhile, the Commerce Department recently increased tariffs on USD 240 billion worth of steel and aluminum products, including key auto parts for electric vehicles and buses.
