Media reports say Trump is considering significant tariff cuts on U.S.-made cars, sending auto stocks higher.

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U.S. Republican Senator Bernie Moreno and auto industry insiders revealed to the media on Friday that President Trump is considering granting significant tariff reductions for U.S. auto production, which could effectively wipe out most of the costs currently borne by major car companies.

In an interview, Moreno stated:

"The signal to all car companies around the world is: if you do final assembly in the United States, we will reward you. For Ford, Toyota, Honda, Tesla, General Motors—these are almost the top five automakers ranked by U.S. content—they will be exempt from tariffs."

Moreno, a former auto dealer, is now a member of the Senate Commerce Committee, which oversees auto-related issues, and is actively involved in auto policy matters.

After the news was released, automakers' stock prices rose accordingly. Ford closed up 3.7%, Chrysler parent Stellantis rose 3.2%, and General Motors rose 1.3%.

Analysts believe that if this extended tariff reduction policy is finalized, it will provide greater incentives for automakers to build factories in the U.S., aligning with Trump’s policy goal of creating American jobs.

The U.S. Department of Commerce previously stated in June that it plans to implement an "import adjustment offset" for qualified U.S.-assembled vehicles: 3.75% of the suggested retail price in the first year to address the tariffs on imported auto parts, and 2.5% in the second year.

Moreno and auto industry insiders said that Trump is considering maintaining the offset at 3.75%, extending the period to five years, and expanding the coverage to American engine production.

Moreno said he believes Trump will make a final decision soon. He stated:

"Ultimately, of course, it’s up to the President, but I am absolutely excited that we are now creating an incentive system that truly distinguishes those who rely solely on imports from those who manufacture in the United States."

Moreno added that automakers with significant final production stages in the U.S. should receive tariff exemptions:

"You see, at the end of the day, they are doing exactly what we want them to do—pay employees well in the U.S., do final assembly in the U.S., and sell cars in the U.S."

White House Official: "Still Speculation"

When asked for comment on the proposal, a White House official told media that Trump and the administration are "committed to a nuanced and multi-faceted approach to ensure domestic production of automobiles and their components."

However, the official added: "Any discussion of administration policy remains speculative until the President signs any formal action."

In May, Trump imposed a 25% tariff on more than $460 billion worth of autos and parts imports annually, but subsequently reached agreements with countries including Japan, the UK and the EU to reduce tariffs on those countries and regions.

The Commerce Department also said in May that it would raise tariffs on more than 400 products of steel and aluminum, many of which are auto parts, totaling about $240 billion in annual imports. These parts include auto exhaust systems, electrical steel (used for electric vehicles), and bus components.

It is not yet clear whether automakers will be able to use the exemptions to offset the impact of steel and aluminum tariffs.

In addition, the Trump administration has postponed the final implementation of new tariffs on heavy trucks, which were scheduled to take effect this week, and is considering whether to impose a new 25% tariff on them.

Earlier, General Motors said it could face up to $5 billion in costs from tariffs this year, while Ford said it would be hit with $3 billion in gross tariff impacts.

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