U.S. President Trump signed an executive order to adjust car tariffs to support domestic manufacturing.

Taiwan • Business • 04/30 00:31
U.S. President Trump signed an executive order to adjust car tariffs to support domestic manufacturing.

On April 29, 2025, President Donald Trump of the United States signed two executive orders to adjust the tariff policy on automobile and component imports, to provide a short-term buffer for American car manufacturers. The new policy allows certain vehicles assembled in the United States with foreign parts to be exempt from the 25% import tax and provides phased compensation for qualifying components. This adjustment, made after prolonged lobbying by the automotive industry, aims to protect domestic manufacturing and encourage the repatriation of supply chains to the United States.

Key Updates

04/30 09:30

Due to Uncertainty from Trump's Tariff Policy, Stellantis Pauses Full-Year 2025 Forecast

On April 30, 2025, global automaker Stellantis announced that due to the frequent changes in President Trump's tariff policies on imported cars and components, creating an uncertain market outlook, the company has decided to withdraw its financial guidance for the full year 2025 and reassess its capital expenditure plans. Other automakers, such as General Motors and Mercedes-Benz, have also withdrawn their financial forecasts due to tariff uncertainties, highlighting the automotive industry's significant concern over changes in U.S. trade policies.

04/30 09:02

EVA Air's Response to U.S. Tariff Policies: Adjusting Flight Routes and Adding Cargo Flights to Southeast Asia

In response to the U.S. reciprocal tariff policy, EVA Air is closely monitoring the changes in passenger demand during the summer and anticipates a shift in some cargo volume from China to Southeast Asia. The company has launched a route adjustment plan, aiming to add cargo flights to destinations like Penang, Hanoi, and Bangkok. General Manager Sun Chia-ming mentioned that passenger transport saw growth in the first quarter, while the cargo market is adjusting its routes due to supply chain shifts, allowing for a flexible response to market changes.

04/30 07:05

S&P Global: The trade war will not affect the credit ratings of the US and China in the short term. According to S&P Global, following Trump's tariff hikes, the US rating remains stable, while China's rating has been downgraded by Fitch.

In early April 2025, President Trump of the United States announced tariffs on global goods imported into the U.S., raising market concerns regarding the sovereign credit ratings of both China and the U.S. S&P Global indicated that in the short term, the trade war would not directly impact the sovereign credit ratings of China and the U.S., maintaining a stable outlook for the U.S.'s AA+ credit rating and noting the resilience of China's A+ credit rating. However, after Trump's announcement of tariffs, Fitch downgraded China's credit rating by one notch, becoming the first major agency to adjust China's credit rating.

04/30 05:03

US Companies Stockpile Inventory to Mitigate Tariffs, First Quarter Economic Data Affected

In early April, U.S. President Trump announced a 145% tariff on Chinese products. To avoid the high tariffs, companies significantly increased imports in March, leading to the U.S. trade deficit expanding to a record high of $162 billion. This move increased the total import amount, negatively affecting the GDP for the first quarter of 2025, with the possibility of economic growth stalling or contracting. Multiple institutions forecast a decline in first-quarter GDP, highlighting the direct impact of trade policy on economic activity.

04/30 05:03

Adidas is under pressure to raise prices due to high tariffs imposed by the US, and the CEO warns that the Samba and Campus shoes might be affected.

The German sports brand Adidas experienced a 155% increase in net profit and a 12.7% increase in revenue in the first quarter of 2025. However, as a result of the high import tariff policies implemented by former U.S. President Trump, CEO Björn Gulden warned that the prices of shoes such as the Samba and Campus models might increase in the U.S. Given the uncertainty surrounding tariff policies, Adidas has not adjusted its full-year financial forecast and stated that it is unable to predict how price increases will affect consumer demand.

04/30 00:31

U.S. President Trump signed an executive order to adjust car tariffs to support domestic manufacturing.

On April 29, 2025, President Donald Trump of the United States signed two executive orders to adjust the tariff policy on automobile and component imports, to provide a short-term buffer for American car manufacturers. The new policy allows certain vehicles assembled in the United States with foreign parts to be exempt from the 25% import tax and provides phased compensation for qualifying components. This adjustment, made after prolonged lobbying by the automotive industry, aims to protect domestic manufacturing and encourage the repatriation of supply chains to the United States.

04/29 21:30

The United States is Facing Economic Shocks Driven by Policy: Increasing Instability Due to Trade Deficit and Pressure from the Debt Ceiling.

In the spring of 2025, the U.S. economy faces instability, with a trade deficit reaching $162 billion USD as companies are importing in advance to cope with high tariffs. The consumer confidence index dropped to 86, and the manufacturing activity index fell to -35.8. Tariff policies have triggered a reorganization of supply chains, leaving the Federal Reserve in a dilemma between cutting interest rates and controlling inflation. The federal debt ceiling issue heightened market unease, causing the S&P 500 index to drop by 10% and foreign capital to withdraw. Economists warn of an imminent policy-driven economic shock.

04/29 19:02

In response to Trump's tariff policies, Taiwanese electronics manufacturing giants like Inventec, Foxconn, and Wistron have strategically established factories in Texas.

Major Taiwanese electronics contract manufacturers such as Inventec, Foxconn, Wistron, Wiwynn, Quanta, and Compal have responded to the high tariff policies of former U.S. President Trump by establishing or expanding their operations in the United States, with Texas becoming the preferred location. These companies' investments reflect their focus on the U.S. market and their quick adaptability to the restructuring of the global supply chain. Texas attracts Taiwanese investment with its vast land, stable electricity supply, and low taxes, and could become a major hub for Taiwan's electronics manufacturing industry in the U.S.

04/29 17:30

The U.S. consumer confidence index dropped to its lowest point in five years, mainly due to worries about tariff policies.

The World Large Enterprises Federation reported on April 29, 2025, that the United States Consumer Confidence Index fell to 86.0 in April, the lowest since May 2020, marking the fifth consecutive month of decline. Consumers are pessimistic about the future economy, employment, and income, especially worried about the high tariffs on Chinese goods, which has become a key factor in the drop in confidence. The tariffs have caused supply chain strains and increased prices, further impacting consumer spending plans.

04/29 15:02

U.S. Treasury Secretary Yellen: The U.S.-India trade agreement is nearing completion, and negotiations with South Korea and Japan are going well.

On April 29, 2025, U.S. Treasury Secretary Scott Bessant stated that significant progress has been made in trade negotiations between the United States and India, South Korea, and Japan. The agreement with India is nearing completion and could be one of the first agreements to be signed; the framework of the agreement with South Korea is in place, but it is influenced by the elections; talks with Japan have entered a critical phase, with the G7 summit possibly playing a key role. These negotiations are occurring in the context of President Trump's "reciprocal tariffs" policy, as Asian countries actively respond to tariff pressures.

Trump Signs Executive Orders to Adjust Auto Tariff Policy

On Tuesday, President Trump signed two executive orders on Air Force One while heading to Michigan, officially easing some import tariffs on automobiles and components. These orders amend the 25% auto tariff implemented since early April and the component tariffs set to take effect on May 3, preventing these tariffs from being "stacked" with others like steel and aluminum tariffs.

According to a statement from the White House, these changes will exempt vehicles assembled in the U.S. and using a specific percentage of U.S. or USMCA-compliant parts from import taxes. Specifically, if 85% of a vehicle's parts come from the U.S. or USMCA member countries, the vehicle will be completely tax-exempt in the first year and enjoy partial exemptions in the second year.

Additionally, a compensation mechanism for imported components will be simultaneously activated. Starting May 3, imported parts will face a 25% tariff, but domestic automakers can apply for compensation, with the first-year compensation capped at 3.75% of the vehicle's value, decreasing to 2.5% in the second year, and gradually phasing out thereafter.

Policy Background and Signing Motivation

The Trump administration initially announced a 25% tariff on all imported automobiles and components earlier this month, citing the need to protect national security and promote domestic manufacturing. However, the policy quickly sparked strong backlash from the automotive industry. Major automakers, including Ford, General Motors (GM), and Stellantis, along with industry groups representing suppliers and dealers, warned that this move would result in higher costs, lower sales, and potentially jeopardize the overall competitiveness of the U.S. auto industry.

"We just want to help them during this short transition period; if they can't get the parts, we don't want to punish them," Trump told reporters on his way to Michigan. He emphasized that these adjustments are intended to give automakers time to adjust their supply chains and encourage more production to return to the U.S.

A White House spokesperson also noted that these measures aim to "more effectively eliminate the threat posed by auto imports to national security," emphasizing that this policy adjustment is based on national security research conducted during Trump's first term.

Automotive Industry Response and Official Statements

Automakers generally welcomed this move. Ford CEO Jim Farley stated, "Ford is pleased with and appreciates President Trump's decisions, which help mitigate the impact of tariffs on automakers, suppliers, and consumers." General Motors CEO Mary Barra expressed gratitude for Trump's support of the U.S. auto industry and looked forward to continued collaboration with the government.

U.S. Commerce Secretary Howard Lutnick also confirmed that these executive orders will relieve automakers from bearing multiple tariffs on automobiles, steel, and aluminum simultaneously. He added, "As long as you complete your car production in the U.S., without a doubt, you win."

However, Lutnick also admitted that vehicles currently meeting the 85% U.S. or USMCA parts ratio are still in the minority, indicating that the industry still needs time to adjust its supply chain structure.

Policy Details and Implementation

According to the executive orders, automakers are required to proactively apply for compensation and provide relevant production and import data. Compensation will be conducted through tax refunds or credits, jointly supervised by the Department of Commerce and the Treasury Department. The White House stated that these measures will gradually phase out over the next two years, with the ultimate goal of establishing a U.S.-centric automotive industry supply chain.

Additionally, the executive orders clearly state that companies that have paid auto tariffs will no longer be subject to additional tariffs, such as steel and aluminum taxes or extra tariffs targeting specific countries. This "de-stacking" policy is seen as a direct response to industry pressure.

Michigan Visit and Political Context

Trump's decision to announce this policy adjustment in Michigan has clear political implications. Michigan is a major hub for U.S. auto manufacturing and a key state for Trump's victory in the 2024 presidential election. This trip marks Trump's return to the White House after 100 days and underscores his commitment to manufacturing and blue-collar voters.

In his speech in Michigan, Trump reiterated his "America First" manufacturing policy direction, stating that these tariff adjustments aim "to make the American auto industry stronger, not weaker."

References

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