Trump Offers Tariff Relief on Auto Parts During Michigan Stop

During a visit to Warren, Michigan yesterday, former President Donald Trump rolled out a new policy aimed at easing some of the tariff burden on automakers that build vehicles in the United States—particularly those like Stellantis with a strong domestic footprint. The announcement, made during a rally marking Trump’s first 100 days in office this term, focuses on imported auto parts and was crafted to give U.S. auto assembly plants some breathing room as they navigate a complex and often shifting trade landscape.

“I’ve just signed an executive order to give partial tariff rebates to any company that assembles its cars right here in the U.S.,” Trump told a crowd of supporters at the Warren, Michigan rally. “We gave them a little bit … to give them a little time before we slaughter them if they don’t do this.”

While the 25% auto tariffs under Section 232 of the Trade Expansion Act remain in effect for fully imported vehicles and certain parts, Trump’s new executive order ensures that these duties will no longer stack on top of existing steel and aluminum tariffs or tariffs targeting Canada and Mexico. 

Perhaps most notably, the new rule offers automakers a tariff credit of up to 3.75% of the MSRP on vehicles assembled in the U.S. during the first year. That figure drops to 2.5% through May 2, 2027, before being eliminated altogether. The credit is not a reimbursement, but rather an offset applied to parts used in U.S. vehicle production—only available to final vehicle producers, not parts suppliers.

This policy directly affects Stellantis’ U.S. operations, including the Sterling Heights Assembly Plant (SHAP), which builds the Ram 1500; the Jefferson North Assembly Plant (JNAP), which produces the Dodge Durango and Jeep® Grand Cherokee; and the Mack Assembly Plant, which assembles both the Jeep Grand Cherokee and Grand Cherokee L. JNAP and Mack together form the Detroit Assembly Complex. The policy is also significant for Stellantis’ broader parts supply chain, which relies on imported transmissions, engines, and other components used in vehicles like the Dodge Durango, Jeep Wagoneer, and Ram trucks.

White House officials told The Detroit News the offset is designed to encourage automakers to boost domestic content and U.S.-based jobs. If a vehicle includes 85% U.S. or USMCA content, it would essentially be tariff-exempt in year one under the new order.

Trump emphasized the long-term goals of the move: “We want to see more jobs here, more parts made here, and more cars built by American hands.”

The American Automotive Policy Council, which represents Stellantis, Ford, and GM, issued a statement saying it would review the order and analyze its impact on the auto supply chain.

With Stellantis actively shifting its focus between North American and international production strategies, Trump’s actions could influence future decisions on where key models—like the upcoming midsized Chrysler crossover or Dodge muscle cars—are built. 

One thing’s clear: this policy may give Stellantis a little more room to breathe. But it also signals a renewed pressure on automakers to bring more of their production back to American soil—or face higher costs in the long run.

Source: The Detroit News