President Donald Trump has extended a tariff rebate for domestic automakers until 2030, according to an Associated Press report. The action was part of a proclamation Trump signed on Friday that also established a 25% import tax on medium and heavy duty trucks, effective November 1.

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The administration’s moves are intended to promote American manufacturing while attempting to shield the auto sector from the higher costs created by Trump’s import taxes on parts and raw materials. The special rebate, first announced in April, was originally set to be lowered and then expire in 2027. At that time, Trump had described it as short-term aid during a “transition” period with the expectation that automakers would move production lines back to the U.S.

Senior administration officials stated that the extension and adjustments followed conversations with the auto industry. The goal is to both expand domestic production and make it more competitive. These officials insisted on anonymity as a condition for speaking with reporters before the proclamation was signed.

The amended action provides a rebate of 3.75% relative to the sales price of a domestically assembled vehicle. This figure was calculated by applying the 25% import tax to parts that constitute 15% of a vehicle’s sales price, as multiplying these two percentages equals 3.75%. The rebate will now also be offered to manufacturers of trucks and engines.

Trump had posted about the new tariffs on imported trucks on his social media site on October 6. The proclamation also imposes a 10% tariff on buses. The new tariffs do not apply to imports covered under the U.S.-Mexico-Canada Agreement on trade, which took effect in 2020 and is scheduled for renegotiation next year.

These developments occur as consumers face significant price increases for new vehicles. According to Kelley Blue Book, buyers spent an average of $50,080 on new autos in September, the highest average on record. New auto prices have increased 3.6% from a year ago.

Source: IndexBox Market Intelligence Platform