WASHINGTON 鈥 President Donald Trump signed executive orders Tuesday to relax some of his 25% tariffs on automobiles and auto parts, the White House said, a significant reversal as the import taxes threatened to hurt domestic manufacturers.
Automakers and independent analyses indicate that the tariffs could raise prices, reduce sales and make U.S. production less competitive worldwide.
"We just wanted to help them during this little transition, short term," Trump told reporters. "We didn鈥檛 want to penalize them."
Treasury Secretary Scott Bessent said the goal was to enable automakers to create more domestic manufacturing jobs.
White House press secretary Karoline Leavitt and Treasury Secretary Scott Bessent participate in a news briefing Tuesday at the White House in Washington.
"President Trump has had meetings with both domestic and foreign auto producers, and he's committed to bringing back auto production to the U.S.," Bessent said. "So we want to give the automakers a path to do that, quickly, efficiently and create as many jobs as possible."
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Trump signed one order on Tuesday that amended his previous 25% auto tariffs, making it easier for vehicles that are assembled in the U.S. with foreign parts to not face prohibitively high import taxes.
The amended order provides a rebate for one year of 3.75% relative to the sales prices of a domestically assembled vehicles. That figure was reached by putting the 25% import tax on parts that make up 15% of a vehicle's sales price. For the second year, the rebate would equal 2.5% of a vehicle's sales price, as it would apply to a smaller share of the vehicle's parts.
President Donald Trump speaks to reporters Tuesday as he leaves the White House en route to a rally in Macomb County, Mich.
Consumer confidence down
Meanwhile, Americans' confidence in the economy slumped for the fifth straight month to the lowest level since the onset of the COVID-19 pandemic as anxiety over the impact of tariffs takes a heavy toll.
The Conference Board said Tuesday its consumer confidence index fell 7.9 points in April to 86, its lowest reading since May 2020. Almost one-third of consumers expect hiring to slow in the coming months, nearly matching the level reached in April 2009, when the economy was mired in the Great Recession.
The figures reflect a rapidly souring mood among Americans, most of whom expect prices to rise because of Trump's widespread tariffs. About half of Americans are also worried about the potential for a recession, according to a survey by The Associated Press-NORC Center.
鈥淩attled consumers spend less than confident consumers," said Carl Weinberg, chief economist at High Frequency Economics. 鈥淚f confidence sags and consumers retrench, growth will go down.鈥
A measure of Americans鈥 short-term expectations for their income, business conditions and the job market plunged 12.5 points to 54.4, the lowest level in more than 13 years. The reading is well below 80, which typically signals a recession ahead.
How this gloomy mood translates into spending, hiring, and growth will become clearer in the coming days and weeks.听
On Wednesday, the government will report on U.S. economic growth during the first three months of the year, and economists are expecting a sharp slowdown as Americans pulled back on spending after a strong winter holiday shopping season.
A customer checks his receipts April 10 while waiting in line at the food court at Costco Wholesale store in Glendale, Calif.
Automakers respond
General Motors CEO Mary Barra said the automaker is grateful for Trump's support of the industry, and she noted the company looks forward to conversations with the president and working with the administration.
"We believe the President's leadership is helping level the playing field for companies like GM and allowing us to invest even more in the U.S. economy," Barra said in a statement.
Jim Farley, president and CEO of Ford Motor Company, said his company does more than its peers to manufacture domestically.
"We will continue to work closely with the administration in support of the president's vision for a healthy and growing auto industry in America," Farley said.
But changing direction doesn't help an industry that thrives on stability, said Sam Fiorani, analyst at business forecasting firm AutoForecast Solutions.
"Finding a way to get the auto industry back working has to be paramount in this," Fiorani said. "The tariffs have not looked at this industry, the way it works, and expect it to be able to jump and relocate production at the blink of an eye. It just doesn't work that way.
"Making a production change for vehicle manufacturing takes minimum, months, and usually years, along with hundreds of millions if not billions of dollars," he added. "And so it is not something that they take lightly."
Trader Peter Mancuso works Tuesday on the floor of the New York Stock Exchange.
The tariffs imposed by Trump were seen by some as an existential threat to the auto sector. Arthur Laffer, whom Trump gave the Presidential Medal of Freedom to during his first term, said in a private analysis that the tariffs without any modifications could add $4,711 to the cost of a vehicle.
New vehicles sold at $47,462 on average last month, according to auto-buying resource Kelley Blue Book. Tariffs stress the automotive supply chain, a complex web which spans the globe. Not only do many auto parts cross North American borders several times before being assembled into a finished vehicle, auto manufacturers rely on suppliers around the world for thousands of components.
Increased levies would certainly cost new car buyers 鈥 sensitive to inflation 鈥 more, driving them to the used vehicle market and quickly straining the availability of pre-owned cars. Tariffs also impact the cost of owning and maintaining a vehicle.
How Trump's 2025 tariffs impact e-commerce: What brands need to know and next steps to stay ahead
How Trump's 2025 tariffs impact e-commerce: What brands need to know and next steps to stay ahead
Leveraging its in-house global trade and compliance expertise, breaks down how the April 2 and subsequent tariff announcements are creating new challenges for international e-commerce鈥攁nd what brands can do to adjust their strategies.
The Trump administration has announced major changes to U.S. tariff policy throughout April 2025鈥攎aking waves across global e-commerce. A 10% blanket tariff on all imports, the end of de minimis for China and Hong Kong, and escalating reciprocal tariffs for dozens of countries have created one of the biggest shake-ups in recent trade history.
For e-commerce brands selling internationally, the consequences are already unfolding: higher costs, supply chain disruptions, and stricter customs requirements. According to a recent research survey conducted by Passport in partnership with , 81% of e-commerce decision-makers say shifting tariffs and regulations could put their global strategy at risk.
With the loss of duty-free shipping and greater complexity at the border, brands must quickly rethink pricing, fulfillment, and logistics. Now's the time to take a proactive approach鈥攂efore these changes start cutting into profit margins and affecting customer experience.
Key Trade Policy Updates from the April 2 Announcement
- A 10% blanket tariff applies to all U.S. imports,听except Canada, Mexico, and China as of April 5.
- Country-specific rates are frozen for 90 days. As of April 10, the 10% tariff also applies to countries previously subject to reciprocal tariffs.
- China and Hong Kong are the exception: a 125% reciprocal tariff applies to imports from these markets as of April 10, in addition to the 20% tariff imposed in March for a total 145% tariff; this is in addition to other standard tariffs.
- Postal shipments from China and Hong Kong will be subject to a 120% tariff or $100听per item starting May 2, depending on the valuation method selected by the carrier; the per-item amount increases to $150 on June 1.
- De minimis ends for shipments from China and Hong Kong on May 2.听All goods, regardless of value, will require formal or informal entry.
- The U.S. still plans to eliminate de minimis benefits for all countries once systems are ready to support full enforcement.
Understanding Tariffs and De Minimis
What are Tariffs?
Tariffs are taxes or duties imposed by a government on imported goods. They're used to generate revenue, protect domestic industries, or influence foreign trade relationships. Most tariffs fall into two categories:
- Ad valorem tariffs are calculated as a percentage of the product's 鈥攆or example, a 10% tariff on a $1,000 item would result in $100 in duties.
听 - Specific tariffs are a fixed amount charged per unit, no matter what the item is worth鈥攆or example, $2 per item, whether it costs $10 or $100.
What is De Minimis?
De minimis refers to the threshold below which imported goods can enter a country duty-free or with simplified customs clearance. For e-commerce brands, this threshold plays a key role in keeping cost-effective, especially for low-value, direct-to-consumer (DTC) orders.
Since 2016, the U.S. de minimis threshold has been $800 per person, per day, offering a significant advantage to e-commerce brands by reducing landed costs and avoiding delays through a simplified customs clearance process.
What's Changing in 2025: De Minimis and Tariff Updates
The trade policy updates announced on April 2 mark a substantial adjustment in how e-commerce imports are taxed and processed at the border. Brands that ship globally need to keep up with these critical developments to avoid added costs and issues.
De Minimis Is Ending
The U.S. government has confirmed plans to eliminate the de minimis exemption for all countries once customs systems are equipped to support full enforcement. For now, the most immediate changes apply to shipments from China and Hong Kong:
- May 2: for all goods from China and Hong Kong鈥攕hipments of any value will require formal customs entry and duties. Postal shipments will be subject to a 120% tariff or $100听per item, depending on the valuation method selected by the carrier.
- June 1: The flat-rate postal tariff increases to $150 per item (up from the previous $100听rate)
These updates phase out a long-standing cost-saving tool for DTC brands shipping low-value parcels and are expected to significantly increase landed costs for many e-commerce businesses.
New Tariff Rules Taking Effect
Alongside the end of de minimis benefits, a series of new tariffs are being introduced in phases鈥攕ome of which are already in effect, with more to come in the weeks ahead.
- A 10% blanket tariff applies to all U.S. imports as of April 5, except Canada, Mexico, and China, which are handled separately.
- The 10% rate also applies to countries previously designated for 鈥攖丑别 are frozen for 90 days as of April.
- Imports from China and Hong Kong are subject to a 125% tariff effective April 10, in addition to the 20% tariff imposed in March and any other standard tariffs that apply.听Smartphones, computers, monitors, routers, and some electronics for now.
How Will the April 2025 Tariffs Impact E-commerce Brands?
For merchants, the implications of these new tariffs and the end of de minimis will depend heavily on sourcing, fulfillment models, and shipping strategy. Understanding how these policy updates affect different business types is key to identifying the right operational adjustments.
1. Brands Shipping China-Made Products Directly to the U.S.
What to Expect:
- A 125% reciprocal听tariff effective April 10鈥攐n top of the 20% in additional tariffs introduced earlier this year, as well as any previously existing duties that may still apply
- The end of de minimis on May 2, removing duty-free entry for low-value shipments
- Postal shipments from China will be subject to duties beginning May 2, with a rate of 120% or $100听per item鈥攊ncreasing to $150 per item on June 1
Biggest Challenges:
- Rising landed costs on low-value, high-volume shipments
- Increased customs complexity and longer clearance times
- Pressure to increase prices or change fulfillment strategies
2. Brands Shipping China-Made Products but Fulfilling From the U.S.
What to Expect:
- Higher import costs when bringing inventory into the U.S. from China
- Fluctuating freight costs as carriers respond to shifting demand鈥攊ncluding early spikes as brands rush to reposition inventory, followed by potential drop-offs
Biggest Challenges:
- Balancing higher U.S. duties with continued cross-border shipping costs
- Need for more agile fulfillment options across North America
- Maintaining predictable landed costs to support consistent pricing strategies
3. U.S.-Made Products Shipped to Canada and Mexico
What to Expect:
- Canada's 25% on select U.S.-origin goods is now in effect, as of March 4
- Mexico may impose similar tariffs depending on future U.S. policy moves
Biggest Challenges:
- Uncertainty around tariff timing and enforcement
- Potential impact on price competitiveness in North American markets
4. Brands Sourcing Outside of China (e.g., Vietnam, India)
What to Expect:
- Continued access to the U.S. $800 de minimis鈥攆or now (though bulk imports are subject to reciprocal tariffs, including 10% for Vietnam and India)
- A planned global phaseout of the de minimis exemption once systems are in place
Biggest Challenges:
- Uncertainty around how long de minimis benefits will last
- Need for long-term contingency plans around sourcing and shipping models
What to Do Next: Smart Moves for E-commerce Brands
Whether importing from China, fulfilling regionally, or managing multiple international markets, there are steps every e-commerce brand can take now to stay ahead of these changes.
1. Adjust Pricing and Duty Calculations
Make sure your storefront reflects new tariffs and duties clearly鈥攅ither built into product pricing or broken out at checkout.
2. Consolidate Shipments Where Possible
Reduce brokerage fees and customs processing costs for orders that are not eligible for de minimis exemption听by bundling orders into formal entries instead of multiple low-value shipments鈥攅specially as de minimis thresholds disappear.
3. Review Your Import Strategy
Evaluate whether a "first sale" valuationfor U.S. imports (where duties are based on the price paid to the original manufacturer) could help lower your duty liability. This method requires careful compliance with documentation, export designation, and proof of bona fide sales.
4. Shift to In-Country Fulfillment
Reduce tariff exposure and delivery delays by warehousing inventory within your key markets. In-country fulfillment can improve customer experience and shield your brand from ongoing cross-border disruptions.
5. Optimize Country of Origin and Harmonized Tariff Schedule Classifications
Review your sourcing countries and product design to minimize duties and take advantage of preferential trade agreements where applicable. Accurate Harmonized System (HS) codes and country of origin documentation are essential for compliance and long-term cost savings.
6. File for Duty Drawback on Exports
If you're re-exporting goods that were taxed at import, you may be eligible to recover duties paid. Duty drawback allows merchants to recover 99% of duties and fees paid on goods that are imported and then subsequently exported in the same condition.听This can also apply to raw materials and packaging that are imported into the U.S. and used to manufacture a finished product.
Navigating an Evolving Era of E-commerce
The April tariff changes mark a turning point for cross-border e-commerce. As tariffs rise and de minimis benefits disappear, brands must rethink their global strategies to protect profitability. Success in this new environment will depend on operational flexibility, smarter fulfillment models, and a clear understanding of international trade dynamics.
To keep up with these changes, provides real-time updates on policy announcements, tariff shifts, and expert insights into what they mean for global commerce. It's a practical resource for following developments as they unfold鈥攁nd for understanding how they could shape the future of international selling.
In a more complex and regulated trade environment, long-term success will belong to brands that stay informed, adapt early, and plan ahead.
Methodology
This article includes findings from an online survey conducted by Drive Research in partnership with Passport. The study surveyed 100 U.S.-based e-commerce decision-makers between Feb. 13 and March 7, 2025, to assess global expansion plans, regulatory concerns, and operational challenges. The results carry a margin of error of 卤10% at a 95% confidence level.
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