
Trump eases auto tariffs burden as Lutnick touts first foreign trade deal
WASHINGTON/DETROIT: US President Donald Trump signed a pair of orders to soften the blow of his auto tariffs on Tuesday with a mix of credits and relief from other levies on materials, and his trade team touted its first deal with a foreign trading partner.
The developments helped eased some investor worries about the erratic trade policies of Trump as the president visited Michigan, a cradle of the US auto industry, just days before a fresh set of 25 per cent import taxes was set to kick in on automotive components.
The trip, on the eve of his 100th day in office, came as Americans take an increasingly dim view of Trump's economic stewardship, with indications his tariffs will weigh on growth and could drive up inflation and unemployment.
In his latest partial reversal of tariff policies, the Republican president agreed to give carmakers two years to boost the percentage of domestic components in vehicles assembled domestically.
It will allow them to offset tariffs for imported auto parts used in US-assembled vehicles equal to 3.75 per cent of the total value of the Manufacturer's Suggested Retail Price of vehicles they build in the US through April 2026, and 2.5 per cent of U.S. production through April 30, 2027.
Auto industry leaders had lobbied the administration furiously during the weeks since Trump first unveiled his 25 per cent tariffs on imported vehicles and auto parts. The levies, aimed at forcing automakers to reshore manufacturing domestically, had threatened to scramble a North American automotive production network integrated across the US Canada and Mexico.
It offers the industry a "little relief" as companies invest in more US. production, Trump said as he left Washington for Michigan. "We just wanted to help them ... if they can't get parts, we didn't want to penalise them."
The White House said the change will not affect the 25 per cent tariffs imposed last month on the 8 million vehicles the United States imports annually.
Autos Drive America, a group representing Toyota Motor, Volkswagen, Hyundai and nine other foreign automakers, said Trump's order provided some relief "but more must be done in order to turbocharge the US auto industry."
MORE TARIFF UNCERTAINTY
Candace Laing, president of the Canadian Chamber of Commerce, said the tariff fix fell short of what companies in the deeply integrated North American industry needed.
"Only an end to tariffs provides real relief. Ongoing ups and downs perpetuate uncertainty, and uncertainty drives away business for both Canada and the US" she said in a statement.
The uncertainty unleashed across the auto sector by Trump's tariffs remained on full display Tuesday when GM pulled its annual forecast even as it reported strong quarterly sales and profit. In an unusual move, the carmaker also opted to delay a scheduled conference call with analysts until later in the week, after the details of tariff changes were known.
Meanwhile, US Commerce Secretary Howard Lutnick told CNBC he had reached a deal with one foreign power that should permanently ease the "reciprocal" tariffs Trump plans to impose. Lutnick declined to identify the country, saying the deal was pending local approvals.
"I have a deal done ... but I need to wait for their prime minister and their parliament to give its approval," he said.
White House officials had no further comment on the country in question, but Trump struck an upbeat tone about a deal with India, telling reporters: "India is coming along great. I think we'll have a deal with India."
Lutnick's comments helped further lift stock prices that had been battered by Trump's moves to reshape global trade and force goods makers to shift production to the US. The benchmark S&P 500 Index closed 0.6 per cent higher for a sixth day of gains, its longest streak of gains since November.
WRONG ON EVERY PREDICTION
Trump and his team aim to strike 90 trade deals during a 90-day pause on his reciprocal tariffs announced earlier in April. His administration has repeatedly said it was negotiating bilateral trade deals with dozens of countries.
A chief Trump goal is to bring down a massive US goods trade deficit, which shot to a record in March on a surge of imports aimed at front-running the levies.
Trump's aggressive trade stance has cascaded through the global economy since his return to office in January, and the 90-day pause was unveiled after fears of recession and inflation sent financial markets into a tailspin.
Easing the impact of auto levies is Trump's latest move to show flexibility on tariffs which have sown turmoil in financial markets, created uncertainty for businesses and sparked fears of a sharp economic slowdown. A Reuters/Ipsos poll published Tuesday showed just 36 per cent of respondents approve of his economic stewardship, the lowest level in his current term or in his 2017-2021 presidency.
Meanwhile, the US will release the first quarterly report on US gross domestic product during Trump's term on Wednesday. It is expected to reflect a large drag from his tariffs, mostly from a record surge in imports as companies and consumers front-loaded purchases of foreign goods to try to beat the new levies. The economy is expected to have expanded at a 0.3 per cent annualised rate from January through March, according to a Reuters poll of economists, down from 2.4 per cent in the final three months of 2024.
American and global companies are increasingly sounding the alarm about the tariffs' effects on their ability to plan.
UPS on Tuesday said it would cut 20,000 jobs to lower costs, while US ketchup maker Kraft Heinz and Swedish appliances maker Electrolux were among companies citing tariff headwinds.
About 40 companies worldwide have pulled or lowered their forward guidance in the first two weeks of first-quarter earnings season, a Reuters analysis showed.
"Every single prediction has been proved to be wrong," Yannick Fierling, Electrolux CEO, told Reuters. "I'm surprised if people are claiming they have a view where tariffs are going."
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Borneo Post
an hour ago
- Borneo Post
Favorable biz environment fuels South Asian culinary ventures in China
A waiter arranges tableware in the dining room of a South-Asian food restaurant in Lanzhou, northwest China's Gansu Province on May 15, 2025. – Xinhua photo LANZHOU (June 12): Mint-green sofas, glistening crystal wall lamps, mosaic-tiled walls, and the rich aroma of spiced South Asian cuisine – every detail of Imran Ali's restaurant exudes exotic charm, which has helped it become a hit on social media in Lanzhou, capital city of northwest China's Gansu Province. Hailing from Islamabad, the 33-year-old Pakistani businessman came to China in 2012 to pursue higher education. Over the next 13 years, his culinary journey across the country deepened his appreciation for Chinese cuisine and his emotional connection with China. Upon graduation, he chose to stay and channel his passion for food into a full-fledged career in the restaurant industry. 'China's culinary landscape is incredibly diverse, while diners here are open to trying new things, especially young people who see food as a way to connect and socialise,' Ali said. 'That's why I wanted to introduce authentic South Asian flavors to more Chinese cities.' Ali and his Chinese friends opened five South-Asian food restaurants in Jiangxi and Shanxi provinces years ago, which served as a catalyst for their expansion. Encouraged by their success, he set his sights on a broader market. In October 2024, he launched a new restaurant in Lanzhou. A chef prepares a dish in the kitchen of a South-Asian food restaurant in Lanzhou, northwest China's Gansu Province on May 15, 2025. – Xinhua photo The region's multi-ethnic population and traditional preference for beef, lamb, and wheat-based dishes felt instantly familiar to Ali and gave him confidence in his venture. 'Foreign and Chinese entrepreneurs are treated equally here. The process for business registration, food service licensing, and other formalities is highly efficient and convenient,' Ali emphasised, adding that the friendly business environment made it possible for the smooth opening of his restaurant. In fact, China has been actively improving its business climate nationwide. Government departments are working to offer high-quality services to support foreign investors. Thanks to the favorable local policies, Ali secured all necessary permits including different licenses and certifications within a month. Over the past six months, the business had exceeded expectations, with daily revenue surpassing 20,000 yuan (about US$2,780). According to Ali, the restaurant attracts diverse customers, including international students from Pakistan, Iran, India, and Saudi Arabia, alongside curious young Chinese foodies drawn by its growing reputation. But for Ali, this is just the beginning. The ambitious businessman is now preparing to open another restaurant in Hainan, China's southernmost province, next month. Inspired by the potential of Hainan Free Trade Port, Ali sees the island as a gateway to global opportunities and a new base for sharing South Asian cuisine. 'My dream is to bring South Asian delicacies to people in every province of China. 'This is my way of deepening our bilateral friendship between our two countries,' Ali said, crediting China's welcoming environment and streamlined business policies that helped to turn his vision into reality. – Xinhua China culinary South Asian Xinhua


The Star
2 hours ago
- The Star
Bursa up as investors welcome trade framework
At 5pm, the FBM KLCI rose 6.89 points, or 0.45% to 1,523.84 from Tuesday's close of 1,516.95. KUALA LUMPUR: Bursa Malaysia ended higher yesterday, with investors adopting a cautiously optimistic stance following the announcement of a United States-China trade framework agreement, which includes provisions on technology trade. At 5pm, the FBM KLCI rose 6.89 points, or 0.45% to 1,523.84 from Tuesday's close of 1,516.95. The benchmark index opened 3.91 points higher at 1,520.86 yesterday morning, which was its day's low, and subsequently moved to a high of 1,530.85 in the early session. On the broader market, gainers thumped decliners 545 to 375, while 528 counters were unchanged, 921 untraded and 11 suspended. Turnover soared to 3.27 billion units worth RM2.59bil compared with yesterday's 2.72 billion units worth RM2.09bil. UOB Kay Hian Wealth Advisors Sdn Bhd head of investment research Mohd Sedek Jantan told Bernama that the development in the US-China trade negotiations marks a constructive step toward de-escalation, although it falls short of a material breakthrough. Domestically, the market found additional support from encouraging macroeconomic data, with figures released yesterday by the Statistics Department showing that the sales value of the manufacturing sector rose by 4.8% year-on-year in April 2025, reaching RM160.6bil. — Bernama


The Star
3 hours ago
- The Star
U.S. inflation rises modestly in May, fueling political pressures on Fed
NEW YORK, June 11 (Xinhua) -- Inflation in the United States edged slightly higher in May, with the consumer price index (CPI) rising 2.4 percent on an annual basis, up from 2.3 percent in April, according to the data released by the Bureau of Labor Statistics on Wednesday. The increase was just below economists' expectations of a 2.5 percent rise, based on a FactSet survey. Core inflation, which strips out the often volatile categories of food and energy, climbed 2.8 percent over the past year -- also below the 2.9 percent projected. Despite these softer-than-expected readings, inflation remains above the Federal Reserve's 2 percent target, underscoring ongoing challenges in fully stabilizing prices. The inflation rate likely rose less than expected due to a sharp dip in gasoline prices. Lower energy prices were a "major source of disinflationary/deflationary pressure," noted Adam Crisafulli, an analyst with Vital Knowledge. Gasoline prices fell 12 percent from a year earlier, while clothing prices declined 0.9 percent, and airline fares dropped 7.3 percent. On the other hand, prices for beef, coffee, and housing continued to rise, offsetting the broader easing in other sectors. In financial markets, the report prompted a modest lift in U.S. stock indexes during midday trading, while the U.S. Treasury yields and the U.S. dollar slipped, reflecting expectations that the Federal Reserve may be inching closer to cutting interest rates later this year. Political pressure quickly mounted in response to the CPI data. U.S. President Donald Trump reiterated his call for the Fed to slash interest rates by a full percentage point, while U.S. Vice President JD Vance accused the central bank of engaging in "monetary malpractice" by maintaining current borrowing costs. Although the inflation numbers do not yet reflect significant upward pressure from tariffs imposed by the Trump administration, economists warn the full effects could materialize in the second half of 2025. "The impact of tariffs was smaller than expected in May. We expect to see it more clearly starting next month," said economists with Bank of America Global Research. Combined with the solid May jobs report, the latest CPI data reduce the chances of a nasty bout of stagflation in the United States, according to Bank of America Global Research. "Tariff impacts may begin appearing in the CPI data later this summer," said Seema Shah, chief global strategist at Principal Asset Management, noting the potential for inflation to creep above 3 percent by year-end if trade-related costs feed through the broader economy. "Today's below forecast inflation print is reassuring -- but only to an extent," Shah added. "Tariff-driven price increases may not feed through to the CPI data for a few more months yet, so it is far too premature to assume that the price shock will not materialise."