Howard Lutnick’s tariff credit reversals hit automakers hard

tariff credit – Auto executives who spent months pleading with Commerce Secretary Howard Lutnick over President Trump’s tariff costs were told in October they would receive retroactive credits. Then the credits’ start date was pushed back by six months, leaving companies faci

When auto executives realized last year that President Trump’s tariffs on foreign car parts were on track to cost their companies billions of dollars, they went looking for leverage—fast.

Over months, they called and visited Commerce Secretary Howard Lutnick in his spacious, wood-paneled office near the White House, negotiating, complaining, and pressing for relief in talks that stretched on. Their goal was simple: lessen the damage.

In October, the tone changed. Mr. Lutnick and his aides told the automakers they would receive a credit on auto part tariffs for American-made cars. retroactive to when the levies began in May 2025. according to six industry executives who described the private discussions on the condition of anonymity.

The promise was immediate enough to alter expectations. In an earnings call on Oct. 23, Ford’s chief executive, Jim Farley, thanked Mr. Trump and his team for the credit. The tariffs would still cost Ford $1 billion, Farley said—but it was half as much as previously thought.

Then the ground shifted.

In late December, the automakers were told the credit would start six months later than they had been informed. Privately, executives said they were surprised and felt misled, but they remained quiet publicly because Mr. Lutnick still held significant sway over their business interests.

For companies trying to forecast costs, the change landed like a delayed refund that never arrived on time. The executives said the sudden reversal would cost automakers hundreds of millions of dollars each—more for Ford.

Ford put a number on it quickly after the news. On Feb. 10, Mr. Farley said on an earnings call that the “unexpected and late-year change” meant tariffs would cost Ford $2 billion last year—double the previous forecast. Mr. Farley did not single out anyone for blame.

On Feb. 11, Mr. Farley and the chief executive of General Motors, Mary Barra, showed up at Mr. Lutnick’s chateau-style mansion in Washington for a winter party.

A representative for Mr. Lutnick said the retroactive credit promise was never made the way the automakers understood it. In a statement. Ford spokesman Mark Truby said: “While not every call goes our way. we have greatly appreciated Secretary Lutnick’s willingness to listen to Ford as America’s top auto producer and find creative solutions to tough problems.”.

The credit dispute is only one thread in the larger story of how Mr. Lutnick has operated in his first year in office—an era some government and business figures describe as both forceful and unpredictable.

He has brought an unorthodox style to federal trade and technology policy. and he has done it in a way that keeps partners off balance. pressuring foreign governments and American companies alike into concessions while pushing legal boundaries in efforts to generate new revenue for the government. A Commerce Department spokesman said Mr. Lutnick “has delivered important wins for the American people. ” including “bringing manufacturing back to the American soil” and securing investment commitments from Japan.

But executives in multiple industries have said the same approach can feel erratic. creating instability even when the headline goal is investment and manufacturing expansion. Japanese officials, for example, believed in July they had a deal to cap tariffs at 15 percent. After the administration announced new rates later that month, some products—Japanese beef included—faced tariffs above 40 percent. The Trump administration later walked back the higher tariffs and refunded some money to Japanese firms.

Within the tech and manufacturing pipeline, Mr. Lutnick has also been described as pressing companies for new terms—sometimes by halting payments—to secure what he frames as better deals for the United States. The CHIPS program. which Congress allocated with $39 billion for building computer chip factories. has been part of that leverage. with recipients forced to renegotiate contracts signed under the Biden administration. Chip firms including Micron and TSMC have pledged hundreds of billions of dollars in new investment. numbers tallied by his department show.

Those high-stakes negotiations have occurred alongside an unusually aggressive personal style that shaped Mr. Lutnick’s rise before he entered government. Before serving as commerce secretary. he built his reputation during decades at the Wall Street investment firm Cantor Fitzgerald. where he amassed wealth and prominence and assumed leadership positions at hundreds of corporate entities. at least 818 in all. In interviews cited in a review of his career. people who worked in finance described him as a risk-taker who pushed boundaries.

Now, the automakers’ tariff-credit reversal offers a stark view of what that pressure can mean on the ground: not just politics and policy, but timing—and the money that depends on it.

By Feb. 10, Ford had translated the change into a doubled cost number for 2025. By Feb. 11, Ford and General Motors’ top executives were back in the room at Mr. Lutnick’s Washington home, despite the scramble the late-year shift triggered.

The sequence leaves a question hanging over entire supply chains: if a credit can move months on short notice after officials earlier believed it was retroactive to May 2025, how much of the next industrial calculation is built on promises—and how much is built on risk that can still be reversed?

Howard Lutnick Commerce Department tariffs Ford Jim Farley Mary Barra auto industry President Trump May 2025 tariff credits CHIPS program U.S. trade policy