Economy

This article is an on-site version of our Chris Giles on Central Banks newsletter. Premium subscribers can sign up here to get the newsletter delivered every Tuesday. Standard subscribers can upgrade to Premium here, or explore all FT newslettersKevin Warsh, the presumptive heir to Jay Powell as Federal Reserve chair, gave a speech last Friday acknowledging “new interest in my views” and delivering a stinging attack on the US central bank’s actions since he resigned as a governor in 2011. Too much quantitative easing, a willingness to accommodate lax fiscal policy, mission creep in going green and helping the poor had led to the recent inflation, he said. That and other failings had left the Fed licking its wounds, nursing lost credibility and “generating worse outcomes for our citizens”. Warsh said his speech was a “love letter” to the Fed. But when someone says that the world’s problems come from “inside the four walls of our most important economic institutions” and talks of US central bankers as “pampered princes” that deserved “opprobrium” for failing to contain inflation, it does not sound entirely constructive to my ears. Of course, this was a job application. So let’s constructively critique the speech and ask what a Warsh-led Fed would look like. The good, the exaggerations and what was missing I have an enormous amount of time for much of the critique Warsh was making. Central bankers need humility, should not be pampered in public life, require robust oversight and, indeed, opprobrium if they err. There has been a pervasive tendency in these institutions, not just in the US, to pass the buck on the recent inflation. There has been mission creep into areas outside central banks’ core functions, which undermines both their legitimacy and democracy itself. Warsh was entirely correct to criticise central bankers’ choosing to promote group interests ahead of their mandates to control prices. But we should not exaggerate these problems, as Warsh clearly did. When there is a US president blowing up the postwar, rules-based economic system and the world has suffered a once-in-a-century pandemic, it is just weird to say the main problems come from within economic institutions such as the Fed. Even though Warsh is correct to chide central bankers for denying that the purpose of quantitative easing was to facilitate greater government borrowing and stimulus, he is simply wrong to say that Fed officials “did not call for fiscal discipline at the time of sustained growth and full employment”. Powell has repeatedly said US fiscal policy is “on an unsustainable path . . . and we know we have to change that” (26 mins 55 seconds, for one example).Warsh cites the Fed’s following of fashion on environmental concerns as something that has undermined its legitimacy. But the Fed being a member of the Network for Greening the Financial System between 2020 and 2025, a body that has done precious little, is barely a misdemeanour, and has had no effect on its credibility. And when put to the financial market test over the past two weeks, far from the Fed needing to “mitigate losses of credibility”, it has been the executive branch of the US government — and in particular, the president — whose credibility has been shown to be deficient. Exaggerations are inevitably part of a polemic and understandable in a job application. More concerning was what was missing. Warsh made no attempt to paint an analytical counterfactual apart from to assert that the world would be better now if the Fed had not made all the mistakes he outlined. How much higher would interest rates have needed to rise in 2020 and 2021 to offset government spending and curb inflation? Would this have worked? Are all the analyses that suggest the price rises were impossible to avoid without unacceptable trade-offs wrong? Why?There was no attempt to address these questions. Hawkish heirSo what would Warsh’s Fed look like?The first conclusion must be that it would be more hawkish. Donald Trump might not know this, but Warsh is with the public on inflation. He hates it and would not want it on his watch. Second, it would be more limited in its scope. This would keep the Fed glued to its mandate — and that would be welcome.Third, it would probably be more transparent. Warsh conducted an exemplary review of Bank of England transparency in 2014, which has stood the test of time. Fourth, and this is my supposition, a Warsh-led Fed would start off with the certainties of his speech, but soon find that ambiguities, nuances and trade-offs were in order. What does the IMF expect from tariffs?I have always found it more useful to discuss the things we actually know and the way we think about uncertain events, rather than just talking about what we do not know. In and around the IMF and World Bank spring meetings, central bankers have been doing just that. Those outside the US think Trump’s tariffs generally represent a disinflationary shock to demand that will depress spending and output. This seems to be the settled view at present in the European Central Bank, with President Christine Lagarde having said tariffs were likely to be “disinflationary more than inflationary”. BoE governor Andrew Bailey agreed, and talked about a “growth shock”. Bank of Japan governor Kazuo Ueda said he shared the view of tariffs as a jolt to business confidence. With a stagflationary shock to deal with, Fed officials have been understandably more vague.The IMF had the unenviable job of quantifying the tariff effect on the global economy last week. Its basic position was unarguable. Tariffs would cut growth worldwide and raise inflation in the US. Fund officials talked up the changes in its forecasts with Pierre-Olivier Gourinchas, its chief economist. They said the world economy had entered a new era with the largest imposition of tariffs in a century, that would “greatly impact global trade” and “slow global growth significantly”. The most notable dissent from this stance, however, came from the IMF’s own forecasts, which do not tally with these comments. As the chart below shows, the volume of forecast US goods imports is stable as a proportion of US GDP and rising in real terms every year. Tariffs just are not that consequential in the IMF’s models. In contrast, the Tax Foundation expects US imports to fall 23 per cent. Some content could not load. Check your internet connection or browser settings.Sure, IMF officials have told me that its forecasts have goods declining as a share of nominal GDP. But that itself has interesting implications. If the IMF thinks the volume of US goods imports will rise under tariffs, but the value of those goods will rise at a slower rate, the unit price of US imports (excluding tariffs) falls. Evidence suggests otherwise, although this forecast will put the IMF in the Trump administration’s good books. I don’t want to bang on about IMF forecasts, but I am unconvinced that the following chart demonstrates a “new era” for global trade warnings from IMF officials.Some content could not load. Check your internet connection or browser settings.What I’ve been reading and watchingA chart that mattersThe chart below shows US customs and excise revenues growing faster this year as a result of tariffs, courtesy of Erica York at the Tax Foundation. Trump is right that billions in revenues are flowing into the US Treasury, although not $2bn a day as he likes to claim. He is even more wrong about the tariff revenues being large. Some of the increase will decrease profits, limiting other tax revenues. Tariffs will also deter imports. Another way to scale the revenues is to estimate an annual total. Let’s say customs duties raise $200bn to $300bn in a full year (higher than most estimates). These pale into insignificance compared with US individual income taxes, which are set to raise $2.7tn.Some content could not load. Check your internet connection or browser settings.Recommended newsletters for you Free Lunch — Your guide to the global economic policy debate. Sign up hereThe Lex Newsletter — Lex, our investment column, breaks down the week’s key themes, with analysis by award-winning writers. Sign up here More

Unlock the White House Watch newsletter for freeYour guide to what Trump’s second term means for Washington, business and the worldGeneral Motors has temporarily suspended share buybacks and warned investors that its previous annual guidance can no longer “be relied upon” owing to the uncertainty caused by Donald Trump’s tariff war.The American auto industry has been lobbying hard for a reprieve after the US president imposed a 25 per cent tariff earlier this month on all imports of foreign-made cars, excluding some exemptions for Mexico and Canada. A separate 25 per cent levy on parts is also due to take effect from May 3. In January, GM said it was expecting to report adjusted operating earnings of between $13.7bn and $15.7bn for the full year, with net income between $11.2bn and $12.5bn. It said at the time that the guidance did not account for any policy changes the administration might make on tariffs. The company said on Tuesday it was abandoning that outlook, as it reported a 9.8 per cent drop in first-quarter adjusted profits, and was not yet able to calculate the impact of the tariffs owing to their “evolving nature”.“We believe the future impact of tariffs could be significant,” said chief financial officer Paul Jacobson. “We have temporarily suspended any buyback activity until we have more clarity.” Carmakers in the US are set to be hit hard by tariffs, with almost half of vehicles sold in the country imported from other countries, triggering intense lobbying from the sector. The Financial Times reported last week that Trump was planning to spare auto groups from some of his most onerous tariffs, such as those on steel and aluminium — in a so-called destacking of the duties. Following further news reports on Monday, GM delayed its analyst call that was scheduled for Tuesday until Thursday. GM chief executive Mary Barra said: “We believe the president’s leadership is helping level the playing field for companies like GM and allowing us to invest more in the US economy.”GM reported adjusted earnings of $3.5bn before interest and tax in the first quarter, down 9.8 per cent year on year, on a 2.3 per cent rise in revenue to $44bn — slightly higher than the average analyst estimate, according to S&P Capital IQ.The decline in profits came even as US car sales surged 17 per cent during the first quarter as consumers stampeded to dealer showrooms to buy ahead of the tariffs. Analysts estimate the latest levies could raise the price of a new vehicle between $4,000 and $10,000, depending on the model.GM is widely considered the Detroit Three carmaker most exposed to the tariffs because of its wider operations in Canada and Mexico. It makes about half the vehicles it sells in the US in the two neighbouring countries, including its popular Chevrolet Silverado pick-up truck. It also imports vehicles it sells in the US from South Korea. To mitigate the tariffs, GM has said it plans to increase production of full-size pick-up trucks at its assembly plant near Fort Wayne, Indiana, by about 50,000 units a year. Bernstein analysts expect the tariffs to start affecting financials from May for vehicles and June for parts as inventories wind down, culminating in a $4.5bn hit to GM’s earnings before interest and taxes next year. More

Unlock the White House Watch newsletter for freeYour guide to what Trump’s second term means for Washington, business and the world“I would like to thank Donald Trump without whom this would not have been possible.” Mark Carney, Canada’s 24th prime minister, was too tactful on Monday to actually give the US president credit for his party’s return to office. But it is the Lord’s truth. By coveting Canada’s sovereignty, Trump turned the semi-Trumpian Conservative party’s projected landslide into defeat in the space of weeks. Not bad for the US president’s first 100 days. He might do a similar favour for Australia’s incumbent Labor party this weekend without even threatening to annex the country. But Carney deserves credit for nailing his opponent Pierre Poilievre to the Trumpian mast. Instead of Poilievre’s me-too “Canada First”, Carney proclaimed “Canada Strong”. He did so while also distancing himself from Justin Trudeau, his deeply unpopular predecessor as Liberal prime minister. There are lessons here for Democrats. Had Kamala Harris thrown Joe Biden under the bus with the same dispatch as Carney did to Trudeau, she may have defeated Trump last November. Most of all, Carney showed that non-populists can win in the right conditions — in this case as foil to the world’s chief populist.Full disclosure: I have known Carney since the early 1990s. Though his skills as an economist and central banker were clear, Monday was the first time he stood for election. He turned 60 last month, two days after replacing Trudeau. It is hard to overstate how improbable this looked a few months ago. Carney worked for Goldman Sachs in London and New York. Then he headed the Bank of Canada. After that he became governor of the Bank of England. Then he joined a global investment firm. He promoted ESG at the UN — two abbreviations that would normally debar him from impolite company. If globalism had a name and a face, it would be Carney’s. Only Trump could have converted these millstones into wings. In that respect, America’s 47th president plays unwitting ally to democracy everywhere except at home. He gave Canada’s median voter a crash course in the merits of rules-based internationalism. As the only person to have run two G7 central banks, Carney can claim to know how the global economy works. Canada, like the EU, Mexico and most other countries, has suddenly awoken to the perils of a renegade America. If the US president can threaten the sovereignty of its neighbour and loyal ally, which country is safe?There are two broader Trump-handling takeaways. The first is that obeisance costs more. Not only does Trump disrespect sycophants, he goes out of his way to humiliate them. That also applies to foreign leaders. Trudeau got on a plane to Palm Beach in November when Trump first threatened tariffs on America’s neighbours. Mexico’s leader, Claudia Sheinbaum, did not make the trek. Trump speaks of her with respect; he kept taunting Trudeau as “governor of the 51st state”. Leaders tempted to cut hasty side-deals with Trump should beware. His signature is not binding. Nor will voters necessarily reward them for cosying up to him. Famously commonsensical Canada reminds us that some things — patriotism, dignity — can be valued higher than short-term growth.The second is that Trump is bad for Trumpians. Poilievre sold himself as a milder version of Trump. Peter Dutton, leader of Australia’s (conservative) Liberal party, has done so more brashly. Both locked themselves into a cage of someone else’s making. When Trump took steps to harm their nations’ economies, they could not easily repudiate him. Even low information voters know a flip-flopper when they see one.Other rightwing leaders, notably Italy’s Giorgia Meloni, are resisting a full embrace of Trump. Britain’s Sir Keir Starmer should also pay heed. The more he can depict the populist Reform UK’s Nigel Farage as Trump’s stooge, the tougher his implicit criticism of Trump. Alternatively, Starmer might strike a tariff deal that flattered Trump but could alienate Britain’s friends and partners. It would take guts — but not an unrealistic level of skill — for Starmer to paint both Brexit parties, including the opposition Conservatives, as stooges of a foreign strongman.Therein lies Trumpism’s self-detonating core. Just as Trump is dismissive of allies, he has no loyalty to friends. A large share of congressional Republicans back him out of fear, not devotion. Here again, Trump is providing the world with a crash course. The best way of redeeming the vow of “America [or Canada, Brazil, Britain, Italy, Mexico etc] First” is to play nicely with others. Power and prosperity are multiplied by friends. [email protected] More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Spotify added 5mn paying subscribers in the first three months of the year, even as chief executive Daniel Ek warned about the “short-term noise” around US President Donald Trump’s tariffs. The music-streaming group reached 268mn paying subscribers in the quarter ending March 31, higher than Spotify’s guidance for 265mn. The performance was Spotify’s strongest first-quarter subscriber growth since 2020. “The short term may bring some noise, but we remain confident in the long-term story,” said Ek, adding that Spotify’s free version would offer listeners “the flexibility to stay with us even when things feel more uncertain”. But shares in the company fell almost 8 per cent in pre-market trade on Tuesday, as investors digested its forecasts for the year. Spotify said it expected monthly active users of 689mn in the second quarter, below the 693mn that analysts had forecast, according to Visible Alpha. Spotify’s stock has more than doubled in the past year, as Wall Street rewarded the group for a cost-cutting push that resulted in its first-ever full-year of profit in 2024.Music-streaming services are not affected by Trump’s tariffs, and analysts say that Spotify is relatively shielded from an economic downturn. The group made €225mn in net income on €4.2bn in revenue during the quarter.In the US, Spotify costs $12 a month, compared with $10 a month when the streamer launched in the country more than a decade ago. Spotify was preparing to raise prices in dozens of countries across Europe and Latin America this summer, the Financial Times reported last week. TD Cowen analyst Doug Creutz said Spotify still offered good value for consumers relative to “other entertainment options” and would be “unlikely to see meaningful increases in [cancellations] even if the economy goes into recession”. “People also have important emotional connections to music that become more important during times of stress,” Creutz added.  However, analysts expect that a recession would dent Spotify’s advertising revenue, which makes up about 10 per cent of the total. Spotify’s first-quarter advertising revenue climbed 8 per cent from a year ago, to €419mn. More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Strong sales of cancer drugs and biopharmaceuticals helped push up revenues at AstraZeneca by 10 per cent in the first quarter, as the drugmaker said it would deepen its manufacturing presence in the US. The Anglo-Swedish pharmaceutical group on Tuesday reported revenue of $13.6bn in the first three months of the year, up 10 per cent year on year in constant currencies, and declared it was “firmly committed to investing and growing in the US” as the sector braces for the fallout of Donald Trump’s trade war. Chief executive Pascal Soriot said the FTSE 100 group continued to benefit from its “broad-based source of revenue and global manufacturing footprint”, adding it was planning “even greater” investment beyond its 11 US production sites. The update comes as pharmaceutical groups, including AstraZeneca, prepare themselves for potential US tariffs. Though the industry has so far benefited from exemptions, Trump has repeatedly said he planned to apply levies to the sector. Soriot told reporters that the company’s tariff-related exposure was limited and would fall further as it shifted manufacture of European-made products to the US. “Beyond 2025, any impact will be shortlived, because of the ability we have to move things around,” he said.He added: “When you see the amount of investment that is currently going into the United States, it really sends a very strong signal that Europe has to contribute to . . . pharmaceutical innovation a lot more. Because, unfortunately, otherwise all these jobs — whether they are manufacturing jobs or R&D jobs — are going to move to the US over time.”AstraZeneca derived about 40 per cent of its sales from the US in the first three months of the year and had already committed to investing $3.5bn in America by the end of 2026 as part of a plan to meet an ambitious target of almost doubling revenues by $80bn by 2030. Soriot said the group was making “excellent progress” towards that goal. AstraZeneca shares were down 3 per cent in lunchtime trading in London, which analysts attributed to sales growth being slightly lower than forecasts.However, the company’s core earnings per share — a key metric in the industry — increased 21 per cent to $2.49, well ahead of consensus forecasts. Pre-tax profits were up 21.5 per cent year on year to $3.4bn. Meanwhile, currency-adjusted revenues climbed at least 9 per cent in all regions outside China, in a sign of the drugmaker’s broad-based global business and the strength of demand for its oncology portfolio. Oncology division sales rose 13 per cent, helped by expansions in the use of existing drugs. Sales at the company’s China business increased 5 per cent, as it sought to manage a scandal that led to the detention of a top executive. The group said it might be penalised up to five times the $1.6mn the Shenzhen City Customs Office suspects it owes in unpaid importation taxes. China’s investigation into AstraZeneca triggered the detention in October of Leon Wang, who oversaw the country in his former role as executive vice-president of the international region.The company said it had been separately informed by Chinese authorities that it had made no illegal gain from alleged infringements of personal information regulations.Soriot said the company had “taken accountability” for what had happened in China and made changes to its operations there. “We remain very committed to China,” he said. “It’s an important market for us: not only because millions of patients need our medicines, but also because China has become a very important . . . engine of innovation in our industry.” More

In the end, Canada’s election was as much about the man in the White House as the one who would be prime minister in Ottawa. The margin was thin, but the verdict from Canadians was clear. With President Donald Trump’s tariffs threatening the foundations of their economy, voters wanted Canada’s leader to be the central banker who navigated the global financial crisis and Brexit. Mark Carney, who until Monday evening was not even a member of parliament, is now on track to lead a minority government with a mandate to confront Trump. He has promised a “broad renegotiation of our security and trade relationship” with the US, Canada’s closest ally and largest trading partner.“We are once again at one of those hinge moments of history,” Carney told jubilant supporters at a victory rally in Ottawa. “Our old relationship with the US, one based on steady integration, is over.”The “American betrayal” was a tragedy, Carney said, “but it is also our new reality”. “America wants our land, our resources, our water, our country. These are not idle threats.”After almost a decade of Justin Trudeau’s progressive politics, Carney moved the Liberal party decisively towards the centre, and put Canadian sovereignty and opposition to Trump — who has threatened to annex the country — at the core of his pitch to voters.“It was a very serious election and these issues were almost existential,” Jean Chrétien, Canada’s Liberal prime minister from 1993 to 2003, told the Financial Times. “Mr Carney has a mandate that is clear, the Canadians want him to stand up to the threat that is Mr Trump,” he said. Some content could not load. Check your internet connection or browser settings.Carney’s win will resonate well beyond Canada, especially in western capitals and global boardrooms where the former Goldman Sachs executive is already a known quantity — and now becomes a strong figure among world leaders prepared to stand up to Trump.Sandro Gozi, an Italian politician who led Europe’s liberal parties in EU elections last year, said Carney’s win was “the first victory of democracy against a new and unacceptable imperialistic and bullish action from Washington”.“It can inspire other countries,” said Gozi. “The victory of Carney is of the utmost importance. Not only for Canada but for all the democrats around the world.”Carney’s campaign capitalised on a groundswell of patriotism as Canadians balked at Trump’s taunts and tariffs, pulling Napa Valley wine from liquor store shelves and booing the American national anthem at ice hockey games.As of the early hours of Tuesday morning, the Liberals were on track to win 168 seats in the 343-seat House of Commons, well ahead of the Conservatives at 144 seats but short of a majority.A minority government would present challenges for Carney. His first priority must be to negotiate a voting deal with a partner such as the New Democratic party, leaving his premiership in a holding pattern for now.The NDP, which also supported Trudeau’s previous government, was on track to win seven seats. Though its leader Jagmeet Singh resigned after failing to win his seat, the leftwing party would have the balance of power and could hold Carney to ransom on policy and legislation.NDP leader Jagmeet Singh and his wife Gurkiran Kaur Sidhu on election night More

Unlock the White House Watch newsletter for freeYour guide to what Trump’s second term means for Washington, business and the worldShow video infoChina has stepped up an international propaganda campaign against the US trade war, unleashing slick videos portraying itself as standing up against American “bullying” on behalf of the rest of the world, especially the “weak” in developing countries.Posted by the ministry of foreign affairs on social media, the videos represent a dramatic hardening of Beijing’s diplomatic stance in the trade war and are part of a charm offensive designed to portray China as championing free commerce while Washington “slaps its allies in the face”.The propaganda videos contrast dark scenes of Wall Street chaos and angry American protesters with a bright and futuristic China, illustrated by high-tech humanoid robots and rockets shooting into space.In images chosen to highlight China’s positive relationships with other countries, Mercedes-Benz chief executive Ola Källenius is seen speaking at a recent conference in Beijing and an African traditional tribesman is pictured apparently making a deal with a Chinese businessperson.The latest video, titled “Never Kneel Down”, was released on Tuesday and warns countries not to make deals with the US, reflecting concerns in Beijing that US President Donald Trump is using tariffs to force other countries to join America in isolating China.“Bowing to a bully is like drinking poison to quench a thirst,” the video said. “China won’t back down so the voices of the weak will be heard,” it added, showing images of African children. “Bullying will be stopped . . . when the rest of the world stands together in solidarity, the US is just a small stranded boat.” The rhetoric in the videos, which directly cites the US and even Maga, Trump’s “Make America Great Again” political movement, comes as both sides grapple with the growing fallout of what amounts to an embargo on bilateral trade, with Washington and Beijing levying tariffs of 145 per cent and 125 per cent on each other’s goods respectively. Both have signalled they are open to talks and have granted exemptions to some essential products. But there are still no signs of serious negotiations despite claims from Trump that President Xi Jinping has called him. Xi toured Vietnam, Malaysia and Cambodia this month to strengthen ties as part of what analysts have described as China’s trade war charm offensive that also includes Europe and Latin America. Late on Monday, foreign minister Wang Yi told his counterparts at a meeting of the Brics group of emerging countries that appeasement would only embolden the US “bully” and urged them to fight back. China wants “to try and shore up its support in western and non-western capitals to prevent Trump forming an anti-China trade bloc”, said Neil Thomas, a fellow at the Asia Society Policy Institute’s Center for China Analysis. In the “Never Kneel Down” video, Beijing also tries to warn traditional US allies that Washington is not a reliable partner, highlighting its past treatment of Japan with the 1985 Plaza Accord that led to the appreciation of the yen and “decades of anaemic growth”.The videos, along with increasingly forceful commentaries in state media, show China is digging in for a long stand-off with the US. State-owned Beijing Daily on Monday published a commentary stating it was necessary to view the trade war through the lens of Mao Zedong’s 1938 speeches “On Protracted War” and brace for a prolonged struggle. “Facing the butcher’s knife, many countries previously fantasised about ‘feeding themselves to the wolves’ in exchange for a moment’s fragile safety,” the commentary says. “For China, hoping to gain a reprieve through unilateral compromise is fundamentally impossible.”The commentary says China’s strength lies in remaining patient and resisting premature calls for compromise. Backing down or rushing to negotiate would not only weaken China’s position, but also misunderstand the long-term nature of the conflict, the unnamed author wrote. The tougher rhetoric in the Chinese propaganda recalls the plunge in relations between the two countries during Trump’s first term, when Beijing unleashed a brash new combative approach to international relations known as “wolf warrior” diplomacy — named after a set of films in which Chinese special-operations fighters defeat western-led mercenaries. More

The planned concessions to give automakers more time to relocate production to the United States would still leave substantial tariffs on imported cars and car parts.The Trump administration said it plans to announce measures as early as Tuesday to ease the impact of tariffs on imported cars and car parts to give automakers more time to relocate production to the United States.Tariffs of 25 percent on imported vehicles and on auto parts will remain in place. But the tariffs will be modified so that they are not “stacked” with other tariffs, for example on steel and aluminum, a White House spokesman said. Automakers will not have to pay tariffs on those metals, widely used in automobiles, on top of the tariffs on cars and parts.In addition, automakers will be reimbursed for some of the cost of tariffs on imported components. The reimbursement will amount to up to 3.75 percent of the value of a new car in the first year, but will be phased out over two years, the spokesman confirmed.A 25 percent tariff on imported cars took effect April 3. On Saturday, the tariffs are set to be extended to include imported parts.“President Trump is building an important partnership with both the domestic automakers and our great American workers,” Howard Lutnick, the commerce secretary, said in a statement. “This deal is a major victory for the president’s trade policy by rewarding companies who manufacture domestically, while providing runway to manufacturers who have expressed their commitment to invest in America and expand their domestic manufacturing.”But even with these changes, there will still be substantial tariffs on imported cars and auto parts, which will raise prices for new and used cars by thousands of dollars and increase the cost of repairs and insurance premiums.The modification to the tariffs was reported earlier by The Wall Street Journal. Mr. Lutnick helped automakers secure a major exemption from tariffs in March and has taken on a role advocating relief for some industries hit by the levies.Automakers welcomed the change. “We believe the president’s leadership is helping level the playing field for companies like G.M. and allowing us to invest even more in the U.S. economy,” Mary T. Barra, the chief executive of General Motors, said in a statement on Monday. “We appreciate the productive conversations with the president and his administration and look forward to continuing to work together.” More