US nears tariff relief for auto industry after lobbying push

• Bloomberg

• Updated On Oct 17, 2025 at 01:27 PM IST

The White House is poised to ease tariffs on the US auto industry, a move that would deliver a major win for carmakers that have aggressively lobbied to stem the fallout from record-level import duties.

Trump earlier this year imposed a 25 per cent tariff on fully built vehicles.

The Commerce Department is slated to announce a five-year extension for an arrangement that allows automakers to reduce what they pay in tariffs on imported car parts, according to people familiar with the matter. Previously, that provision was scheduled to sunset after two years.The announcement could come as soon as Friday, the people said, noting that similar tariff announcements have slipped. The policy is expected to be detailed in government documents that also formally implement tariffs on imported trucks.The concession follows months of lobbying by carmakers, including Ford Motor Co. and General Motors Co., to secure relief from President Donald Trump’s tariffs. US automakers face higher costs from the levies he has imposed on imported vehicles, parts and materials, such as steel and aluminum.

GM shares gained as much as 3.8 per cent on the news. Ford and Jeep-maker Stellantis NV also rose.

Ford Chief Executive Officer Jim Farley has said that the US-Japan trade deal provides rivals such as Toyota Motor Corp. a cost advantage worth thousands of dollars per vehicle over competing models made in the US, when factoring in the Asian nation’s lower labor and currency costs. That framework lowered tariffs on Japanese auto imports to 15 per cent from 27.5 per cent .Previously, automakers could offset part of a 25 per cent tariff imposed on imported parts. Under that measure, carmakers who produce and sell completed automobiles in the US could claim an offset worth up to 3.75 per cent of the value of American-made vehicles. The offset was set to reduce after one year to roughly 2.5 per cent , and then be eliminated the following year.Trump earlier this year imposed a 25 per cent tariff on fully built vehicles. His separate tariffs on Canada and Mexico already contain a carveout for vehicles with enough domestic content to meet requirements under the existing North American trade agreement.