Washington (AP) – President Donald Trump Tuesday will sign a decree to soften some of its 25% prices on car cars and car parts, said the White House, a significant reversal while import taxes threatened to injure national manufacturers.
Car manufacturers and independent analyzes have indicated that The prices Could increase prices, reduce sales and make production from us less competitive worldwide. The White House press secretary Karoline Leavitt said in a Tuesday briefing that Trump would sign order later in the day, but refused to provide details on order.
The secretary of the Treasury, Scott Bessent, who joined Leavitt at the Blank Briefing, said that the objective was to allow car manufacturers to create more national manufacturers.
“President Trump had meetings with national and foreign car producers, and he is committed to bringing automobile production to the United States,” said Bessent. “So we want to give car manufacturers a way to do this quickly, effectively and create as many jobs as possible.”
The administration will offer car manufacturers who will end their vehicles at the national level a 15% discount this year, compensating for the cost of prices. This discount would be 10% in the second year, giving manufacturers of car a little time to move the production of parts outside the country in the United States, said a senior manager of the trade department during a call with journalists to preview the decree. The discounts would be available for national and foreign companies with automotive factories in the United States
Stellantis president John Elkann said in a statement that the company appreciates the president’s price rescue measures.
“Although we evaluate the impact of pricing policies on our North American operations in more detail, we are impatiently awaiting our continuous collaboration with the American administration to strengthen a competitive American automotive industry and stimulate exports,” he said.
The CEO of General Motors, Mary Barra, said that the car manufacturer was grateful for the support of Trump to industry, and she noted that the company was waiting for conversations with the president and worked with the administration.
“We think that the leadership of the president helps to level the rules of the game for companies like GM and allowing us to invest even more in the American economy,” said Barra in a statement.
But the change of orientation does not help an industry that thrives on stability, said Sam Fiorani, analyst of the company to forecast companies Autoforecast Solutions.
“Finding a way to bring the automotive industry back by working must be essential,” said Fiorani. “The prices have not examined this industry, the way it works, and expects it to jump and move production in the blink of an eye. It just doesn’t work this way.
“Having a change in production for the manufacture of vehicles takes a minimum, months and generally years, as well as hundreds of millions, even billions of dollars,” he added. “And that’s not something they take lightly.”
The Wall Street Journal first reported the details of the prescription, claiming that it also involves changes in how import taxes are applied to prevent the billing of multiple prices and reduce prices on imported parts to make cars at the national level. The changes would also be retroactive.
The prices imposed by Trump were considered by some as An existential threat to the automotive sector. Arthur Laffer, whom Trump gave to the presidential medal of freedom during his first mandate, said in a private analysis that prices without any modification could Add $ 4,711 to the cost of a vehicle.
New vehicles sold at $ 47,462 On average, last month, according to the book Blue Blue Resource Kelley Blue Book. The prices highlight the automotive supply chain, a complex web that extends over the globe. Not only do many automotive parts cross the North American Borders several times before being assembled in a finished vehicleCar manufacturers are counting on suppliers from around the world for thousands of components.
The increase in levies would certainly cost new – more inflation – more -sensitive car buyers – more, by leading them to the second -hand vehicle market and quickly tending the availability of used cars. Prices too impact The cost of possession and maintenance A vehicle.
The changes come as Trump marks 100 days back White House Going to MichiganA state defined by automotive manufacturing. Trump won the state in last year’s elections promising to increase factory jobs.
However, we do not know what impact the broader prices of Trump will have on the American economy and car sales. Most economists say that prices – which could ultimately reach most imports – would increase prices and the slowdown in economic growth, perhaps harming auto sales despite the relief that administration intends to offer on its previous policies.
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St. John contributed to Detroit.
