President Trump signed a pair of executive orders on Tuesday that walked back some tariffs for carmakers, removing some levies that Ford, General Motors and others have complained would backfire on U.S. manufacturing by raising the cost of production and squeezing their profits.
The changes will modify Mr. Trump’s tariffs so carmakers that pay a 25 percent tariff on auto imports are not subject to other levies, for example on steel and aluminum, or on certain imports from Canada and Mexico, according to the orders. However, the rules do not appear to protect automakers from tariffs on steel and aluminum that their suppliers pay and pass on.
Carmakers will also be able to qualify for tariff relief for a proportion of the cost of their imported components, though those benefits will be phased out over the next two years.
Mr. Trump, speaking on Tuesday before leaving the White House for a trip to Michigan, said the administration wanted to help automakers “enjoy this little transition, short-term.”
“If they can’t get parts, we didn’t want to penalize them,” he said.
The decision to reduce the scope of the tariffs is the latest sign that the Trump administration’s decision to impose stiff levies on nearly all trading partners has created challenges and economic uncertainty for American companies. But even with the concessions announced Tuesday, administration policies will add thousands of dollars to car prices and endanger the financial health of automakers and their suppliers, analysts said.
Mr. Trump signed the executive orders aboard Air Force One as he flew to Michigan, home to America’s largest automakers, for a speech marking his 100 days in office.
Automakers have welcomed any relaxation of tariffs, which they said would raise car prices, cause sales to fall and threaten their financial viability. But the steps will leave in place a 25 percent tariff on imported vehicles that took effect April 3, and a tariff on auto parts that will take effect on Saturday. That will still raise prices for new and used cars by thousands of dollars and increase the cost of repairs and insurance premiums.
On Tuesday, General Motors abandoned a previous forecast for solid profit growth this year as a result of the uncertainty created by Mr. Trump’s trade policies. The carmaker, which sells more vehicles in the United States than any other company, said any profit prediction would be a “guess.”
“The prior guidance cannot be relied upon,” Paul Jacobson, G.M.’s chief financial officer, said during a conference call with reporters.
The automaker also postponed a conference call with financial analysts to discuss its first-quarter results, citing the Trump administration’s expected change to tariff policy. The company will now hold the call on Thursday.
The move comes just weeks after the administration exempted smartphones, computers, semiconductors and other electronics from its punishing China tariffs over concerns from companies like Apple that the import taxes would cause prices for U.S. consumers to skyrocket.
On Tuesday, Howard Lutnick, the commerce secretary, said that the changes stemmed from direct conversations with domestic automakers, and that the administration had been in “constant contact” with the companies to analyze their business and make sure they got the policy exactly right.
“Donald Trump and his presidency are going to bring domestic auto manufacturing back,” Mr. Lutnick said.
In one order signed on Tuesday, the president said the changes would help reduce the industry’s reliance on foreign manufacturing and encourage companies to expand their domestic production.
For one year, the administration will offer automakers an exemption from its auto parts tariffs for 15 percent of the manufacturer’s suggested retail price of an automobile assembled in the United States. That would drop to 10 percent in the second year, beginning on May 1, 2026, and then be eliminated in the third year.
Automakers that assemble cars in the United States will be able to apply for this so-called offset by submitting documentation to the government about their projected imports and tariff costs.
In a second executive order, Mr. Trump detailed new rules that will exempt companies that pay one kind of tariff from paying others. The president said that when one import was subject to multiple kinds of tariffs, “these tariffs should not all have a cumulative effect (or ‘stack’ on top of one another)” because the resulting tariffs were higher than necessary.
The order said carmakers paying a 25 percent tariff to bring in cars and car parts would not be subject to tariffs that Mr. Trump had placed on steel and aluminum or on imports from Canada and Mexico. However, the rules do not appear to protect automakers from tariffs on steel and aluminum that their suppliers pay and pass on.
Products that are subject to the tariffs on imports from Canada and Mexico will no longer be subject to tariffs on steel and aluminum, the order said. But it said goods that were charged tariffs on their steel content would still be charged tariffs on any aluminum content.
Other duties will still be charged on all of the items, including the tariffs that Mr. Trump has imposed on China and tariffs imposed for trade violations, like dumping and unfair subsidization.
The latest rules also leave in place an exemption for parts imported from Canada and Mexico that comply with a treaty that Mr. Trump negotiated during his first term. Both countries are major suppliers to the U.S. auto industry.
The exemption buys carmakers some time, said Lenny LaRocca, U.S. automotive industry leader at the consulting firm KPMG. “It gives them a little bit of time to plan out what their strategy could be,” he said.
But automakers and suppliers say three years is not enough time for them to reorganize their manufacturing operations. Even if they do, they will not be able to make many components as cheaply in the United States as they do elsewhere, which will lead to higher prices.
With the reimbursement on tariffs for auto parts, analysts at Barclays calculated that a $50,000 car could contain $1,875 worth of parts that would not be subject to tariffs during the first year.
Even cars manufactured in the United States typically use far more imported parts than would be covered by an exemption. Most cars also contain components from Japan, South Korea or China that will be subject to tariffs.
“Relief today doesn’t fix the longer-term challenge,” analysts at Bernstein said in a note Tuesday. “U.S. car prices are heading higher just as economic momentum fades.”
Nevertheless, auto executives expressed gratitude that Mr. Trump had addressed at least some of their concerns. In a statement on Monday, Mary T. Barra, the chief executive of G.M., said the company appreciated “productive conversations with the president and his administration.”
“The president’s leadership is helping level the playing field for companies like G.M. and allowing us to invest even more in the U.S. economy,” she said.
“Stellantis appreciates the tariff relief measures decided by President Trump,” John Elkann, chairman of the company that owns Dodge, Jeep, Ram and Chrysler, said in a statement. “While we further assess the impact of the tariff policies on our North American operations, we look forward to our continued collaboration with the U.S. administration to strengthen a competitive American auto industry and stimulate exports.”
The executives also hinted that they hoped continued talks with administration officials would lead to further concessions. “We will continue to work closely with the administration in support of the president’s vision for a healthy and growing auto industry in America,” Jim Farley, the chief executive of Ford, said in a statement.
The exemption appears to have been engineered in part by Mr. Lutnick, who has played a role in securing lucrative exemptions for some industries in recent months. In a statement on Monday, he called the deal “a major victory for the president’s trade policy.”
The arrangement will reward companies “who manufacture domestically, while providing runway to manufacturers who have expressed their commitment to invest in America and expand their domestic manufacturing,” Mr. Lutnick said.
Veronique de Rugy, a senior research fellow with the Mercatus Center, called the move a “shakedown” by the Trump administration, saying the administration had imposed pain on automakers and then demanded promises of investments from them.
“The Trump tariffs created a crisis for automakers, and now the administration is offering partial relief — not out of economic wisdom, but as a reward for promising to play ball,” she said.
Neal E. Boudette contributed reporting.
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