Trump extends auto parts tariff relief for U.S. production
U.S. President Donald Trump on Friday authorized the extension of a tariff relief scheme for auto parts to be used in American-made vehicles and the imposition of 25 percent tariffs on medium- and heavy-duty trucks and their parts, starting Nov. 1, with some exceptions, Kyodo reports.
Japan and the European Union, which reached trade agreements with the United States earlier this year, will be exempt from the additional tariffs, a senior U.S. administration official said.
"This proclamation should work in tandem with every other trade deal that the president has entered into," the official said. "To the extent there is a situation where vehicles or parts will be imported from a trading partner with which we have made an agreement for a different tariff rate, then that rate will apply."
The proclamation signed by Trump also stated that a 10 percent tariff will be imposed on imported buses.
The White House said Trump decided on the implementation of the latest tariffs "to bolster American industry and protect national security."
Currently, the United States basically imposes a 25 percent tariff on medium- and heavy-duty trucks, and a 2 percent duty on buses.
In May, the Trump administration imposed a new 25 percent tariff on auto parts but took steps to mitigate the impact of the protectionist measure following an outcry from the car industry.
Automakers argued that due to the complexity of their supply chains, it would take time to domestically procure all the parts necessary to produce vehicles in the United States.
The administration introduced the tariff relief program that allows automakers to apply for a reimbursement of up to 3.75 percent of the value of each U.S.-made vehicle in the first year and 2.5 percent in the second year, before the offset arrangement stops.
The signed proclamation said the 3.75 percent offset will now continue to 2030.
As with other sectoral tariffs, the Trump administration invoked Section 232 of the Trade Expansion Act of 1962 to investigate whether imports of medium- and heavy-duty trucks, as well as their parts and buses, pose a threat to national security.
The probe, started in spring, was headed by Commerce Secretary Howard Lutnick. Trump said in the proclamation that he was advised by Lutnick, based on the results of the probe, that additional tariffs were required to prevent such imports from undermining U.S. national security.