Trump admin to soften impact of auto tariffs, relief for several Indian exporters

In a bid to cushion the blow of his administration’s aggressive tariff stance, US President Donald Trump will on Tuesday announce steps to reduce the impact of automotive tariffs, especially on foreign parts used in domestically assembled vehicles, officials said.

The move, confirmed by the White House, comes ahead of Trump’s visit to Michigan to mark his first 100 days in office.

“President Trump is building an important partnership with both the domestic automakers and our great American workers,” Commerce Secretary Howard Lutnick said in a statement. “This deal is a major victory for the President’s trade policy by rewarding companies who manufacture domestically, while providing runway to manufacturers who have expressed their commitment to invest in America and expand their domestic manufacturing.”

According to The Wall Street Journal, which first reported the development, carmakers will be shielded from overlapping tariffs, such as those on steel and aluminum, and reimbursements will be offered for levies already paid.

The relief comes amid warnings from automakers and suppliers who have cautioned that steep tariffs, including the planned 25% duty on imported auto parts, would disrupt supply chains, raise consumer prices, and force production halts.

A coalition of leading auto industry groups, including General Motors, Toyota Motor, Volkswagen, Hyundai, and others, had urged the administration last week to reconsider the tariff plan, citing risks of layoffs, bankruptcies and production shutdowns.

India’s auto component exports to the US were valued at USD 6.79 billion in FY24, according to industry estimates, while imports stood at USD 1.4 billion with a 15% duty. Before the tariff announcement, the US had charged almost no duty on imported auto parts.

The tariff easing is the latest in a series of policy adjustments by the Trump administration, which has sought to balance its protectionist rhetoric with mounting pressure from domestic industries and global partners.

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