The Trump administration has signaled tariff relief on auto parts, following intense lobbying by industrial leaders. On Monday, White House officials confirmed that President Donald Trump plans to reduce tariffs on auto parts for cars manufactured in the United States, as first reported by The Wall Street Journal. The administration will also prevent automakers from being taxed twice — avoiding tariffs on top of existing levies such as those on steel and aluminium. A formal proclamation is expected to be signed by the president as soon as Tuesday.
“President Trump is building an important partnership with both the domestic automakers and our great American workers,” said Commerce Secretary Howard Lutnick. “This deal is a major victory for the president’s trade policy by rewarding companies that manufacture domestically, while providing runway to manufacturers who have expressed their commitment to invest in America and expand their domestic manufacturing.”
This decision echoes Trump’s earlier statement in April, indicating his intent to “help car companies” by giving them time to shift parts production domestically. Trump had exempted auto parts from the 25% tariffs until May 3. Some major US automakers, including Tesla and Ford, have either paused new model production or suspended shipments to China due to retaliatory Chinese tariffs.
Since launching sweeping tariffs at the start of the month, Trump has made several policy reversals. After announcing reciprocal tariffs on all nations, investor uncertainty triggered a sell-off of US assets. Economists warned of a sharp economic slowdown fueled by escalating trade wars. Earlier in April, Trump also exempted electronics from tariffs after Apple’s stock plunged, stating: “I helped Tim Cook recently and that whole business.”
Meanwhile, China has denied ongoing tariff talks, despite Trump’s repeated claims to the contrary. Treasury Secretary Stott Bessent told CNBC that “it’s up to China to de-escalate” tensions. However, the administration’s softening stancehas sparked a relief rally across global equity markets, especially ahead of key earnings reports from major US technology firms.
European markets open higher as global rally continues
The easing of tariff pressures provided a boost to European markets. As of 09:15 am CEST, major indices showed gains:
- Germany’s DAX: +0.46%
- Euro Stoxx 50: +0.33%
- France’s CAC 40: +0.06%
- UK’s FTSE 100: +0.11%
Investors remain cautiously optimistic that further tariff concessions and progress on trade de-escalation could sustain this global market recovery.
