WASHINGTON: US President Trump has agreed amid growing pressure from the U.S. auto industry to modify his planned automotive tariffs. Trump authorized the award of credits to automakers so that these earn some credits for every vehicle that is assembled in the United States.Upon maturity or exercise, or even trading of such credits against half the value of an import, the measure hastily allowed them enough time to bring back production.It is allowed to import duty-free spare parts for 3.75% of the sticker price for American cars, and the rates are going to gradually reduce to 2.5% in the second year.
Such phased relief is to create added incentive for companies to pull more parts' production to the U.S. Over the coming weeks, heartened U.S. carmakers GM and Ford 'skeptical' viewed from inside the White House as the industry remains filled with uncertainty. The steel and aluminum tariffs and the extra tariffs levied on cars and parts subject to tariffs have now been lifted with the new announcement.
While several automakers, including General Motors, and efficient Ford, whole sweet tooth commented on such measures, uncertainty keeps right back in the industry. This move designed to slow down the incremental price hikes and chain disruption caused by rising tariffs has, in fact, been considered with great restraint from the automobile industry due to fears of lower sales, higher prices for consumers.
Yet again, this agreement means no release from the steep 145%, at best, tariffs levied on the Chinese components. In this regard, the fact that China's trade stance still currently remains locked in conflict with the US makes such an issue of paramount importance. The move, however, is being seen by the US auto industry as an attempt to relax Trump's tariff action while keeping their concerns about the U.S. automobile industry in mind.
The trade-worrying U.S. GDP figures are due to be released today which is expected to take some hits away from its growth due to the Tariffs. Thus, Trump Offers some relief but trade policy volatility makes life difficult for automakers today.
[Source Credit: Business Recorder]
