The US administration announced plans to implement measures by Tuesday to reduce the impact of automotive import tariffs, allowing manufacturers additional time to shift production to US soil.
While the 25 per cent tariffs on imported vehicles and components will continue, they will be restructured to prevent overlap with other tariffs, including those on steel and aluminium, according to a White House representative, quoted by the New york Times.Vehicle manufacturers will be exempt from paying multiple tariffs on these essential materials.
Manufacturers will receive partial compensation for tariffs paid on imported components. The reimbursement scheme will provide up to 3.75 per cent of a new vehicle’s value in the first year, gradually decreasing over two years, as confirmed by the spokesperson.
The automotive industry responded positively to these changes. “We believe the president’s leadership is helping level the playing field for companies like GM and allowing us to invest even more in the US economy,” Mary T Barra, CEO of General Motors, said in a statement Monday. “We appreciate the productive conversations with the president and his administration and look forward to continuing to work together.“
The 25 per cent vehicle import tariff became effective April 3, with an expansion to include parts scheduled for Saturday. “President Trump is building an important partnership with both the domestic automakers and our great American workers,” Howard Lutnick, the commerce secretary, said in a statement. “This deal is a major victory for the president’s trade policy by rewarding companies who manufacture domestically, while providing runway to manufacturers who have expressed their commitment to invest in America and expand their domestic manufacturing,” he further added.
At Tuesday morning’s news conference, White House press secretary Karoline Leavitt announced Trump’s intention to sign an auto tariff-related executive order. Additionally, Treasury Secretary Scott Bessent, while avoiding specific details about tariff relief, emphasised the policy’s focus on encouraging domestic production.
However, despite the adjustments, significant tariffs will remain on imported vehicles and components, resulting in substantial price increases for new and used vehicles, alongside higher repair and insurance costs.

American consumer confidence in the economy has dropped to its lowest level since the onset of the Covid-19 pandemic. The Conference Board reported a sharp 7.9-point decline in April, bringing the index down to 86, marking the lowest reading since May 2020.
The decline is being largely attributed to growing concern over tariffs imposed by President Donald Trump’s administration, which have included a 10 per cent levy on most imports and a steep 145 per cent tariff on Chinese goods, along with duties on steel, aluminium and automobiles.
Nearly one-third of consumers now expect a slowdown in employment—levels not seen since April 2009 during the Great Recession. An Associated Press-NORC Center survey also found that around half of Americans are worried about a potential recession.
“Rattled consumers spend less than confident consumers,” said Carl Weinberg, chief economist at High Frequency Economics. “If confidence sags and consumers retrench, growth will go down.”
The index measuring short-term expectations for income, business conditions and employment dropped 12.5 points to 54.4—its lowest in over 13 years and far below the threshold of 80, which often signals a looming recession.
The largest drops in confidence were seen among Americans aged 35 to 55 and those earning more than $125,000 annually.
Also read: US job openings drop to 7.2 million in March amid tariff-driven uncertainty
Market volatility has contributed to the downturn in sentiment, with the S&P 500 down 6 per cent for the year, the Dow Jones falling 5 per cent, and the Nasdaq declining by 10 per cent in 2025 despite recent recoveries.
Spending intentions have weakened across the board. Fewer Americans are planning to purchase homes or cars, amid high mortgage rates and property prices. Overseas vacation planning has dropped from 24.1 per cent in December to 16.4 per cent in April. Restaurant spending plans also saw a historic decline.
The US government is set to release its report on first-quarter economic growth on Wednesday, with economists projecting a notable slowdown following a robust holiday spending season. Meanwhile, Friday’s Labor Department report is expected to reflect continued job growth, although some analysts anticipate a marked dip in hiring.
Consumer expectations of a downturn within the next 12 months have reached a two-year high.