President Trump has decided to give automakers a break on some of his tariffs, the latest retreat from a get-tough policy he has said is aimed at bringing manufacturing jobs to America and driving up government revenues.
The formal announcement is expected on Tuesday ahead of a Michigan rally marking Trump's 100 days in office. Trump's on-again, off-again tariffs have sparked whipsaw moves in financial markets, and most polls show Americans are concerned about Trump's handling of the economy.
The move will ensure that the different types of tariffs charged by the administration don't stack up on imports of foreign cars. The Wall Street Journal first reported the shift on Monday. An administration official confirmed the changes, speaking on condition of anonymity.
Importers of foreign auto parts will be able to get some reimbursement from the government for tariffs for the next two years.
The break will both reward domestic manufacturers while "providing runway" to those needing time to invest in domestic plants, Commerce Secretary Howard Lutnick said in a statement provided by the administration.
"President Trump is building an important partnership with both the domestic automakers and our great American workers," Lutnick said in the statement.
Trump's 25% tariffs on steel and aluminum imports kicked in last month, hurting the auto industry. That was followed by a 25% tariff on imported cars. Later this week, imported car parts will also be hit with a 25% tariff. (The tariff rules are different for cars imported from Mexico and Canada under the United States-Mexico-Canada Agreement.)
Automakers have complained the tariffs are too high, though the United Auto Workers has praised the auto tariffs because they say they will bring more manufacturing jobs back to the United States.
The administration has also slapped 10% across-the-board tariffs on imports, but abruptly paused higher country-by-country rates for 90 days — except for Chinese goods.
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