Cyprus News Agency

U.S. Commerce Secretary Howard Lutnick said in a statement provided by the White House, "President Trump is forging a significant partnership with both local car manufacturers and our great American workers."

Lutnick added, "This agreement is a major victory for the president's trade policy, rewarding companies that produce locally while creating opportunities for manufacturers committed to investing in America and expanding local production."

According to the Wall Street Journal, which first reported the development, the move means that automakers paying tariffs will be exempt from other taxes such as those on steel and aluminum.

Automakers will be eligible for a partial refund on tariffs paid for imported car parts, based on the value of their U.S. vehicle production.

Vehicles manufactured outside the United States will still be subject to Trump's tariffs but will be exempt from other taxes. The plan is expected to be formally approved later on Tuesday.