President Trump has enacted a new directive aimed at alleviating the effects of auto tariffs by broadening the scope of credits available to qualifying car manufacturers. Details of this initiative were outlined in a proclamation released on Friday.

Under this new order, automakers importing car parts into the United States will benefit from a 3.75 percent reduction on the vehicle’s retail price, with this arrangement now extended through 2030. The program was originally set to conclude in 2027.

The White House explained that this percentage corresponds to the anticipated tax impact when a 25 percent tariff is imposed on 15 percent of a U.S.-assembled automobile’s value.

In addition, the executive order issued on Friday establishes a 10 percent tariff on bus imports and introduces new 25 percent tariffs on medium- and heavy-duty truck imports, taking effect from November 1.

This decision by the White House comes in response to car manufacturers reporting potential losses totaling approximately a billion dollars due to the administration’s recent trade policies. Industry lobbying groups have been advocating for measures to mitigate these financial challenges.

In April, Trump issued an executive order that shielded manufacturers from being hit twice by the president’s auto tariffs.

A senior administration official on Friday said “the idea here is we want to incentivize domestic manufacturing vehicles, and one way to do that is to say that, all right, if we understand that not 100 percent of a vehicle can be used with goods that are already here in the United States.”

“And so for the parts that do need to be imported, we are essentially allowing a credit so that they can offset any tariff liability that they would accrue, because they are importing parts just to manufacture here in the United States,” the official added.