According to the Associated Press, US President Donald Trump has extended the tariff reduction for domestic car manufacturers until 2030. The move was part of a proclamation signed by Trump on Friday that also imposed a 25 percent import tax on heavy-duty and medium-duty trucks, effective Nov. 1.
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The administration’s actions are aimed at boosting American manufacturing while trying to protect the auto sector from higher costs from Trump’s import taxes on parts and raw materials. The special discount, first announced in April, was initially set to taper off and then expire in 2027. At the time, Trump described it as short-term aid during a “transition” period with the expectation that automakers would bring production lines back to the United States.
Senior government officials stated that the extension and adjustment came after discussions with the auto industry. The goal is to develop domestic production and make it competitive. The officials insisted on anonymity as a condition of speaking to reporters before signing the declaration.
The amendment provides a 3.75 percent discount on the selling price of domestically assembled vehicles. This figure was calculated by applying a 25% import tax to parts that make up 15% of the car’s sales price, so that the multiplication of these two percentages equals 3.75%. This discount will now be offered to truck and engine manufacturers as well.
On October 6, Trump posted on his social network about new tariffs on imported trucks. The announcement also imposes a 10 percent tariff on buses. The new tariffs do not apply to imports covered by the US-Mexico-Canada trade agreement, which took effect in 2020 and is due to be renegotiated next year.
These developments come at a time when consumers are facing significant price increases for new cars. Buyers spent an average of $50,080 on new cars in September, the highest average on record, according to Kelley Blue Book. The price of new cars has increased by 3.6% compared to last year.
Source: IndexBox Market Intelligence Platform
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