Trump offers credits to soften auto tariffs as industry reels

President Donald Trump stepped back—slightly. On Tuesday, he signed a new order softening his auto tariffs just days before fresh 25% duties were set to hit imported car parts.

The move offers temporary relief. U.S. carmakers will be able to claim credits worth up to 15% of the value of vehicles assembled domestically, using them to offset import costs. It’s a narrow path to stability in an industry still caught in a whirlwind.

The White House framed it as a measure of support. “We didn’t want to penalise them,” Trump said before heading to Michigan, home of the U.S. auto legacy. But behind the words lies a deeper tension—between protectionist ambition and economic disruption.

Auto firms had been lobbying hard. The tariffs threatened a production model that spans borders—integrating U.S., Mexican, and Canadian supply chains. General Motors, facing the uncertainty head-on, withdrew its annual forecast and delayed its investor call.

Others followed. UPS announced 20,000 job cuts. Electrolux and Kraft Heinz warned that chaotic trade policies are making long-term planning almost impossible. In total, more than 40 companies have adjusted their earnings guidance in just two weeks.

Markets, for now, responded with optimism. A vague signal from Commerce Secretary Howard Lutnick—claiming a deal with a foreign partner, pending local approval—helped lift stocks. The S&P 500 closed higher for a sixth straight session.

But the fundamentals are softening. U.S. GDP is expected to have grown by just 0.3% in the first quarter, dragged down by import surges and consumer stockpiling. Trump’s 90-day pause on broader tariffs has done little to calm broader fears.

His administration hopes to finalise 90 trade deals in the same 90 days. But for most businesses, the clock is ticking louder than the promises.

“Every single prediction has been proved wrong,” said Electrolux CEO Yannick Fierling. At this point, markets aren’t asking for precision—they’re asking for clarity.

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