The auto industry finally received some clarity Tuesday from the White House, as President Trump signed an executive order providing some exemptions on tariffs on foreign car and parts imports.

The exemptions aid automakers by preventing tariffs on foreign-made cars from stacking on top of other tariffs currently imposed by the administration.

This means automakers paying Trump's auto tariffs on imports won't also be charged for other duties. The White House is calling it "de-stacking," meaning automakers will pick the highest tariff that applies to them and pay only that one — meaning, for instance, no steel or aluminum tariffs or Chinese fentanyl-related tariffs on top of the existing tariff on foreign autos.

The move will be retroactive, meaning automakers could be reimbursed for tariffs already paid. Trump signed the executive order formalizing the new rules aboard Air Force One ahead of a rally in the state of Michigan.

"Automakers will pay either steel or auto tariff, whichever is higher, and any rebates applied will be paid from tariff revenue, so no cost to the government," a Commerce Department official said.

Furthermore, tariffs on auto parts, coming on May 3, would also be reimbursed up to an amount equal to 3.75% of the value of a US-made car for one year, then 2.5% the year after, before phasing out.

The 3.75% calculation comes from multiplying 15% — the percentage of foreign-made parts automakers said they would need time to replace — multiplied by the 25% tariff on foreign auto parts. This would be an "offset," the official said, against the automaker's tariff bill for importing those parts.

In the plan's second year, the 2.5% reimbursement comes from multiplying 10%, which the administration hopes will be the percentage of foreign parts that can't be sourced yet in the US, multiplied by the 25% parts tariff.

Read more: The latest news and updates on Trump's tariffs

The Commerce Department official said these changes to the auto parts tariffs will help automakers get more runway to onshore their supply chain, expand their plants, and hire more US workers.

"Finish your cars in America, and you win," the official said.

Automakers, particularly the Big Three, were seeking clarity from the White House on tariff exemptions, and the moves today are likely welcome, though still a burden, comparatively speaking.

"Ford welcomes and appreciates these decisions by President Trump, which will help mitigate the impact of tariffs on automakers, suppliers, and consumers. 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. Ford sees policies that encourage exports and ensure affordable supply chains to promote more domestic growth as essential," Ford CEO Jim Farley said in a statement.