The U.S. government has announced a big change in its auto tariff policy. President Trump’s administration says it will reduce the impact of tariffs, on the car industry. These tariffs had been causing trouble for many American carmakers and workers.

The Trump administration will also amend the 25% tariff on foreign auto parts to allow automakers to be reimbursed up to an amount equal to 3.75% of the value of a U.S.-made car for one year. The reimbursement would go down to 2.75% of the car's value the next year, and later phased out.

US President Donald Trump is set to ease the impact of automotive tariffs, a move expected to benefit US carmakers by removing overlapping import duties on parts used in domestically assembled vehicles and reimbursing levies already paid.