New fuel economy rules won't go into effect right away, as they first must go through normal regulatory procedures, including a public comment period.
Secretary of Transportation Sean Duffy characterized the old standards as a "green new scam" and said that consumers had been "brainwashed" into thinking they were necessary. "All the nonsense will be taken out of the cars," he said.
Motor City moment

The appearance of executives from all 3 automakers comes at a tense political time for the historic trio, as they balance strong public support for the president with intense private lobbying to have tariffs reduced.
Each of the companies contributed $1 million to Trump's inauguration fund, and the group successfully advocated for a March pause of potential 25% tariffs on Canada and Mexico. Yet Trump ultimately announced 25% tariffs weeks later on all automotive goods entering the United States, albeit with numerous exceptions and bilateral trade deals added in the following months.

The auto executives at the White House didn't raise the tariff issue, but they were sure to mention big investments they were making in the United States: $5 billion from Ford, $13 billion from Stellantis. "You could do more," Trump at one point quipped to Farley, speaking of the $5 billion investment.

"They're doing it because of the tariffs," Trump said of the automakers' U.S. investments.
Ford and the Detroit-based United Auto Workers union have been especially critical of agreements reached with countries like Japan and South Korea while duty bills pile up within North America's highly integrated supply chain.
Those countries, plus the European Union, are currently subject to 15% tariffs on new vehicles.
The tariff policies for Canada and Mexico are more complicated.

The United States currently charges tariffs of 25% on the non-U.S. content of vehicles imported from its neighboring nations, even if the vehicles comply with the U.S.-Mexico-Canada free trade agreement. Procedures for assessing those charges were not published until May 20, and enforcement has ramped up significantly since then.

Collectively, U.S. tariffs have cost automotive importers more than $30 billion in duties so far in 2025, according to the most recent federal data. Goods coming from Mexico and Canada account for about $8.5 billion of that.

Dearborn-based Ford explained how the current tariff arrangement puts the company at a disadvantage in a July 30 statement: "15% tariffs on vehicles is simply not a strong enough incentive for competitors to move production to the U.S.," the company said, referring to the new announced tariff rates on autos from Japan, South Korea and the European Union.

The statement continued: "Japan and South Korea have real advantages in labor costs, materials and currency. Meanwhile, Ford is facing billions due to multiple tariffs on auto parts, steel, aluminum and more that increase our costs of building in America.
"We are committed to working with the administration to get this right. Our goals are completely aligned, and we have had constructive engagement, but we have urgent work to do to protect our domestic industry.”

Deregulatory push

The new CAFE standards announced Wednesday, which set fleetwide miles per gallon targets for automakers, were long expected from Trump. He and other Republicans have frequently bashed Biden-era standards as an “EV mandate” that would push the industry too quickly toward the new powertrain.

Trump signed an executive order on the first day of his term earlier this year, pledging to “eliminate” that mandate and other burdensome regulations on the auto industry. The order also suggested that pro-EV policies rendered gas-powered vehicles “unaffordable.”

The president and Republican allies in Washington have made significant strides to slash automotive regulations over the past 10 months.
They canceled influential state-level standards that would have required 100% EV sales in California and several other states by 2035, have taken action toward removing the legal underpinning of all Environmental Protection Agency rules on tailpipe air pollution, and removed all fines for CAFE penalties.

That final policy, part of the Republicans’ One Big Beautiful Bill Act, preemptively muted the impact of Trump’s new fuel economy standards announced Wednesday.
Even if automakers fail to meet the standards, they will not be penalized.
That allows automakers like the Detroit Three, at least while Trump is in office to sell as many of their higher-emission offerings as they want without needing to worry about paying fines or buying emission credits. Low-mpg models like the Ford F-150, Chevrolet Silverado and Ram 1500 are major profit drivers for the companies.

The White House said the new CAFE standards would save American families $109 billion in total, whereas the Biden-era standards would have raised the average cost of a new car by nearly $1,000, relative to prices under Trump's reset standards.
The White House also said that "even if far-left Democrats return to power, the current CAFE standards are sensible, so U.S. automakers are not held to infeasible standards."