President Trump's new order grants US automakers tax relief on tariffs, allowing parts producers to deduct a percentage of vehicle prices until 2026. This shift, responding to manufacturers' requests for time to adjust production back to the US, alters previous 25 percent tariffs and reduces pressure on vehicle prices. While the White House maintains this initiative won't burden taxpayers, concerns remain over rising car costs despite improved local production due to high US healthcare expenses impacting manufacturing decisions.
The new executive order allows US automakers to deduct up to 3.75% of the price of a new car from tariffs until April 2026.
Manufacturers requested these changes to allow time to adjust production to the US, aiming to not penalize them during the transition.
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