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According to rumors and statements from officials, U.S. President Donald Trump intends to soften automobile tariffs by supporting some changes sought by the industry. This will allow for the cancellation of certain tariffs on foreign parts for cars and trucks manufactured in the United States.
A White House representative stated that tariffs on imported automobiles could also be paused, preventing the overlapping of multiple tariffs — specifically referring to tariffs on steel and aluminum.
"This deal is a major victory for the president's trade policy as it rewards companies that manufacture domestically while providing opportunities for manufacturers willing to invest in America and expand domestic production," said Commerce Secretary Howard Lutnick.
The expected shift comes just as Trump is preparing to travel to Michigan, the heart of the American auto industry, to celebrate the first 100 days of his second term in the White House. The official mentioned that the declaration pausing auto tariffs could be signed today, ahead of Trump's scheduled speech in Macomb County.
Experts expect this move to be the latest in Trump's constantly evolving trade strategy following his decision earlier this month to suspend tariff hikes against dozens of trading partners to allow time for negotiations. The anticipated changes will occur just before the 25% tariffs on foreign auto parts are set to take effect on May 3. According to the official, under the planned changes, automakers will be able to receive partial reimbursement of tariffs on imported auto parts, based on the value of vehicles they manufacture in the United States.
Recall that automakers, dealers, and parts suppliers had been requesting relief, warning that Trump's tariffs could disrupt the tightly integrated North American supply chain. Ford welcomed President Trump's decision, stating it would help ease the tariff burden on automakers, suppliers, and consumers.
"We will continue to work closely with the administration to support the president's vision of a healthy and growing automotive industry in America," Ford Motor Co. said.
Mary Barra, CEO of General Motors Co., also noted in her statement that she believes the president's leadership helps level the playing field for companies like GM and allows for even greater investment in the U.S. economy.
Last week, industrial groups in a letter to the administration warned that tariffs on imported auto parts could increase costs at U.S. manufacturing plants, undermining efforts to revive the domestic auto industry.
Impact on the Currency Market
As for the currency market, these news developments provided no significant support to the U.S. dollar.
Current Technical Outlook for EUR/USD
Buyers now need to focus on taking the 1.1435 level. Only this would allow aiming for a test of 1.1487. From there, it might be possible to climb toward 1.1530, although achieving this without support from major players will be quite difficult. The furthest target is the 1.1570 high.
In case of a decline, I expect serious buying activity only around the 1.1378 area. If there are no large buyers there, it would be wise to wait for a retest of the 1.1320 low or to consider opening long positions from 1.1265.
Current Technical Outlook for GBP/USD
Pound buyers need to capture the nearest resistance at 1.3420. Only this would allow aiming for 1.3460, above which it will be rather difficult to break through. The furthest target for buyers is the 1.3510 area.
In the event of a decline, bears will attempt to regain control over the 1.3385 area. If successful, breaking through this range would deliver a serious blow to the bulls' positions and push GBP/USD down to a minimum of 1.3340, with the prospect of reaching 1.3280.
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