The White House confirmed President Trump’s plan to reduce tariffs on auto parts for vehicles made in the United States, just days before a 25% import levy exemption expires. As global markets continue their positive momentum, European stock indices are expected to open higher.
The move to reduce tariffs follows strong lobbying from industrial leaders. On Monday, White House officials officially confirmed that President Trump intends to lower tariffs on auto parts for American-made vehicles, as first reported by The Wall Street Journal. Additionally, automakers will be spared from paying additional tariffs on imports such as steel and aluminum. A formal proclamation is expected to be signed by the president as early as Tuesday.
“President Trump is building an important partnership with both the domestic automakers and our great American workers,” said Commerce Secretary Howard Lutnick in a statement. “This deal is a major victory for the president’s trade policy by rewarding companies that manufacture domestically, while providing runway to manufacturers who have expressed their commitment to invest in America and expand their domestic manufacturing.”
This decision aligns with Trump’s earlier remarks in April, where he expressed his intent to “help car companies” and provide them “a little bit of time” to shift production of parts to the U.S. Auto parts were exempted from the 25% tariffs until May 3, though several U.S. automakers, including Tesla and Ford, have suspended plans for new model production or halted shipments to China in response to retaliatory tariffs.
Trump’s policy has seen several shifts since his initial announcement of reciprocal tariffs on all countries earlier this month. Investors responded by offloading U.S. assets amid mounting concerns about a global economic slowdown due to the ongoing trade war. Trump also recently exempted electronic products from tariffs after a sharp decline in Apple’s stock. “I helped Tim Cook recently and that whole business,” he remarked to reporters. Meanwhile, China denied ongoing tariff negotiations, although Trump has repeatedly insisted that talks are underway. Treasury Secretary Stott Bessent remarked in a CNBC interview, “It’s up to China to de-escalate” the trade war. Despite these tensions, the Trump administration seems to be easing its strict tariff approach, which has contributed to a relief rally in global markets ahead of key U.S. tech earnings later this week.
The news has boosted European stock markets, with futures indicating a higher open for major indices. As of 5:35 am CEST, Germany’s DAX had gained 0.22%, the Euro Stoxx 50 was slightly up, and the FTSE 100 saw a 0.16% rise.
Global markets also continued their upward trend during Tuesday’s Asian session. By 5:30 am CEST, Japan’s Nikkei 225 had risen 0.38%, Australia’s ASX 200 was up 0.96%, Hong Kong’s Hang Seng Index surged 2%, and South Korea’s Kospi rose by 0.63%. U.S. futures were also higher, with the Dow Jones gaining 0.12%, the S&P 500 up 0.16%, and the Nasdaq advancing 0.22%.
Despite the positive market movement, the euro weakened against the U.S. dollar during the Asian session, reflecting a fading “risk-off” sentiment as signs of a de-escalating U.S.-China trade war emerged. The decline in demand for safe-haven assets like the euro and Swiss franc also contributed to this shift, with gold retreating sharply. As of 5:46 am CEST, the EUR/USD pair had dropped 0.37%, while the USD/CHF pair had decreased by 0.55%. Spot gold fell 1% to $3,311 per ounce following a modest rebound on Monday.
