Trump to Sign Executive Order Walking Back Some Auto Tariffs

President Trump plans to sign an executive order Tuesday that will walk back some tariffs for carmakers, administration officials said, removing some levies that Ford, General Motors and others have complained would backfire on U.S. manufacturing by raising the cost of production and squeezing their profits.

The changes will modify Mr. Trump’s tariffs so that carmakers who pay a 25 percent tariff on imported cars are not subject to other levies, for example on steel and aluminum, officials said in a call with reporters Tuesday.

Carmakers will also be able to qualify for tariff relief for a proportion of the cost of their imported components, though those benefits will be phased out over the next two years.

The decision to reduce the scope of the tariffs is the latest sign that the Trump administration’s decision to impose stiff levies on nearly all trading partners has created chaos and economic uncertainty for American companies.

On Tuesday, General Motors said it would abandon a previous forecast for solid profit growth this year as a result of the uncertainty created by Mr. Trump’s trade policies. The carmaker, which sells more vehicles in the United States than any other company, said that any profit prediction would be a “guess.”

“The prior guidance cannot be relied upon,” Paul Jacobson, G.M.’s chief financial officer, said during a conference call with reporters.

The automaker also postponed a conference call with financial analysts to discuss its first-quarter results, citing the Trump administration’s expected change to tariff policy. The company will now hold the call on Thursday.

Mr. Trump is expected to sign the order on Tuesday to put the changes into effect. The order would come on the same day that Mr. Trump is scheduled to fly to Michigan, which is home to America’s largest automakers, for a speech marking his 100 days in office.

Automakers have welcomed any relaxation of tariffs, which they said would raise car prices, cause sales to fall and threaten their financial viability. But the steps will leave in place a 25 percent tariff on imported vehicles that took effect April 3, and a tariff on auto parts that will take effect on Saturday. That will still raise prices for new and used cars by thousands of dollars and increase the cost of repairs and insurance premiums.

The move comes just weeks after the administration exempted smartphones, computers, semiconductors and other electronics from its punishing China tariffs over concerns from companies like Apple that the import taxes would cause prices for U.S. consumers to skyrocket.

On Tuesday, Howard Lutnick, the commerce secretary, said that the changes stemmed from direct conversations with domestic automakers, and that the administration had been in “constant contact” with the companies to analyze their business and make sure they got the policy exactly right.

“Donald Trump and his presidency are going to bring domestic auto manufacturing back,” Mr. Lutnick said.

Analysts have said that the policy will offer carmakers some relief, but that automakers will still face a substantial financial impact from the Trump administration’s tariffs.

An official with the Commerce Department said in a call with reporters Tuesday that for the next year, automakers will receive an exemption from the 25 percent tariff on imported auto parts that is equal to 15 percent of a car’s retail price. In the second year, the exemption will be offered for 10 percent of a car’s retail price, but it will disappear in the third year.

With the reimbursement on tariffs for auto parts, for example, analysts at Barclays calculated that a $50,000 car could contain $1,875 worth of parts that would not be subject to tariffs.

Even cars manufactured in the United States typically use far more imported parts than would be covered by an exemption. “The key tariff headwinds remain,” Barclays analysts said in a report Tuesday.

Automakers will continue to be subject to other tariffs, for example the 2.5 percent tariff that is typically paid on imported cars. The administration has not yet made public the text of the executive order, and many other details remain unclear.

“Relief today doesn’t fix the longer-term challenge,” analysts at Bernstein said in a note Tuesday. “U.S. car prices are heading higher just as economic momentum fades.”

Nevertheless, auto executives expressed gratitude that Mr. Trump had addressed at least some of their concerns. In a statement Monday, Mary T. Barra, the chief executive of General Motors, said that the company appreciated “productive conversations with the president and his administration.”

“The president’s leadership is helping level the playing field for companies like G.M. and allowing us to invest even more in the U.S. economy,” she said.

“Stellantis appreciates the tariff relief measures decided by President Trump,” John Elkann, chairman of the company that owns Dodge, Jeep, Ram and Chrysler said in a statement. “While we further assess the impact of the tariff policies on our North American operations, we look forward to our continued collaboration with the U.S. administration to strengthen a competitive American auto industry and stimulate exports.”

The exemption appears to have been engineered in part by Mr. Lutnick, who has played a role in securing lucrative exemptions for some industries in recent months. In a statement Monday, Mr. Lutnick called the deal “a major victory for the president’s trade policy.”

The arrangement would reward companies “who manufacture domestically, while providing runway to manufacturers who have expressed their commitment to invest in America and expand their domestic manufacturing,” Mr. Lutnick said.

Neal E. Boudette contributed reporting.