US to Make Automakers Pay Higher of Steel or Auto Tariffs, Commerce Secretary Says

U.S. Commerce Secretary Ruthnick announced a new policy that will require automakers to pay either the steel tariff or the auto tariff—whichever is higher.

Speaking at a press conference on Tuesday, Ruthnick said the move is intended to close loopholes that allow automakers to reduce their costs by choosing lower tariff rates. “We’re going to make sure our rules support American workers and our industries,” she said.

The decision is part of a broader strategy by the Biden administration to strengthen domestic manufacturing and reduce dependence on foreign supply chains. It follows a series of measures aimed at reshoring key industries such as semiconductors and clean energy technologies.

Industry groups voiced concern over the potential cost implications. “This could mean tens of millions more in annual expenses for major manufacturers,” said James Hollins, an analyst at AutoTradeWatch.

The policy is expected to take effect later this year, pending regulatory review and public comment.