The Republican said the new system will “quickly” reduce foreign manufacturing and import dependence on parts and cars
United States President Donald Trump (Republican Party) signed on Tuesday (29.br.2025) a decree that creates a credit line of up to 15% for US automakers. This is the decree (PDF – 217 kB) and in (PDF – 221 kB).
The measure grants automakers a credit of up to 15% of the amount of vehicles set up in the US. Credits can be used to compensate for the cost of imported parts. The announcement was a few days after a 25% rate get into force on imported automotive parts.
Understand
The measure requires the 25% tax on imported parts to be applied to the 15% maximum credit line, which would be 3.75%. According to the decree, the automaker could import an amount of parts equivalent to 3.75% of the suggested value of the vehicle.
In a hypothetical scenario, if a car cost $ 50,000, the automaker could apply for compensation for the government. In this case, the 3.75% would be applied to $ 50,000, and the company could import up to $ 1,875 on pieces and not pay tax for any of them.
The value of 3.75%, however, will be valid only in the first year of the decree, which runs from April 3, 2025 to April 30, 2026. From the 2nd year, from May 1, 2026 to April 30, 2027, the government will require the 25% to be applied to 10% of the credit line, resulting in 2.5%.
In the same previous scenario, but with 2.5%, the $ 50,000 car automaker could import up to $ 1,250 on pieces and get rid of tariffs. The benefit will end after May 1, 2027.
The purpose of gradually ending with the benefit is to attract automakers in the period of the highest discount, with 3.75%, to ensure a large enough production not to depend on external help at the end of the benefit.
Companies like General Motors and Ford already produce much of their products in the US, however, still face rates for imported parts. The US President’s decree aims to benefit such companies while creating an incentive for new automakers to come to the country.
“I consider that the modified system will more effectively eliminate the threat to national safety, as it will reduce the dependence on foreign manufacturing and importation of automobiles and automotive parts.”said Trump in the decree.
