WASHINGTON (AP) — President Donald Trump signed executive orders earlier this week to relax some of his 25 percent tariffs on automobiles and auto parts, a reversal as the import taxes threatened to slow domestic manufacturing.

Automakers and independent analysts have indicated that the tariffs could lead to higher prices, reduce sales and make American production less competitive worldwide.

Trump portrayed the changes as a bridge toward automakers moving more production into the United States.

“We just wanted to help them during this little transition, short term,” said Trump. “We didn’t want to penalize them. “

Treasury Secretary Scott Bessent said the goal was to enable automakers to create more domestic manufacturing jobs.

“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.”

Trump signed one order that amended his previous 25 percent auto tariffs, making it easier for vehicles that are assembled in the United States with foreign parts to not face prohibitively high import taxes.

The amended order provides a rebate for one year of 3.75 percent relative to the sales prices of a domestically assembled vehicles.

That figure was reached by putting the 25 percent import tax on parts that make up 15 percent of a vehicle’s sales price.

For the second year, the rebate would equal 2.5 percent of a vehicle’s sales price, as it would apply to a smaller share of the vehicle’s parts.

A senior Commerce Department official, who insisted on anonymity to preview the order on a call with reporters, said automakers told Trump that the additional time would enable them to ramp up the construction of new factories after automakers warned that it would take time for them to shift their supply chains.

The official said automakers would over the next month announce additional shifts for workers, new hires and plans for new facilities.

Stellantis Chairman John Elkann said in a statement that the company appreciates the president’s tariff relief measures.

“While we further assess the impact of the tariff policies on our North American operations, we look forward to our continued collaboration with the U.S. Administration to strengthen a competitive American auto industry and stimulate exports,” he said.

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. “As the right policies are put in place, it will be important for the major vehicle importers to match Ford’s commitment to building in America. If every company that sells vehicles in the U.S. matched Ford’s American manufacturing ratio, 4 million more vehicles would be assembled in America each year.”

Changing direction, however, 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.”

The White House’s Rapid Response account on X said Trump signed a second order to prevent his various tariffs from being stacked on top of his existing taxes on imported autos and auto parts.