Trump to Delay Canada, Mexico Tariffs on Autos for One Month
President Donald Trump is exempting automakers from newly imposed tariffs on Mexico and Canada for one month, the White House said Wednesday, as a temporary reprieve following pleas from industry leaders.
“We are going to give a one-month exemption on any autos coming through USMCA,” White House Press Secretary Karoline Leavitt said, referring to the trade deal Trump negotiated with Canada and Mexico in his first term. “Reciprocal tariffs will still go into effect on April, 2, but at the request of the companies associated with USMCA, the president is giving them an exemption for one month so they are not at an economic disadvantage.”
The exemption also applies to auto parts that comply with the trade pact, a White House official said. Administration officials had met Tuesday to discuss the matter with the heads of Ford Motor Co., General Motors Co. and Stellantis NV, according to people familiar with the matter, who weren’t authorized to share the details publicly.
The White House consideration of delaying the auto tariffs was reported earlier by Bloomberg News, prompting US automaker shares to jump. Stellantis gained 9.2% on Wednesday in New York, the most since March 2022. GM’s stock rose 7.2% while Ford advanced 5.8%.
The move highlights how the Trump administration is working on multiple fronts to secure additional automobile factories in the US, long one of the president’s top priorities. Part of the reason for a reprieve would be to buy time for the automakers to come up with plans to move more investment and production to the US, some of the people said.
In another example of how the administration is looking to provide relief to affected sectors, US Agriculture Secretary Brooke Rollins told Bloomberg News on Wednesday that they are considering exempting certain agricultural products from the tariffs imposed on Canada and Mexico.
Detroit’s automakers have aggressively sought to halt or revise Trump’s tariffs over concerns about the potentially catastrophic effects. Carmakers and experts have warned that a rise in costs from the 25% tariffs imposed on US neighbors this week could send auto prices up by thousands of dollars almost immediately and seize up supply chains.
The United Auto Workers union, which represents factory employees at GM, Ford and Stellantis, on Tuesday said it was in “active negotiations” with the Trump administration to “shape the auto tariffs in April to benefit the working class.” Stellantis had sought the UAW’s help in securing relief from the tariffs, according to people familiar with the matter.
Trump’s call with automotive leaders on Tuesday included Ford Executive Chair Bill Ford, the great-grandson of founder Henry Ford, as well as the automaker’s CEO Jim Farley, GM CEO Mary Barra and Stellantis Chairman John Elkann.
The discussion came after top executives from each company spoke with officials from the Commerce Department last Thursday. Administration officials have stressed throughout the recent discussions that Trump wants automakers to return investments and vehicle production to the US, according to people familiar with the matter.
GM, Ford and Stellantis in separate statements thanked Trump for the temporary exemption for USMCA-compliant vehicles, each emphasizing that they have committed billions of dollars to existing and planned investments in the US since the pact took effect.
Trump in a pair of social media posts on Wednesday said he had spoken to Canadian Prime Minister Justin Trudeau and told him he was unconvinced the flow of fentanyl across their border had stopped and blamed the fellow leader’s border policies for the situation. Trump said the “call ended in a ‘somewhat’ friendly manner,” but accused Trudeau of “trying to use this issue to stay in power.”
The delay tees up another crossroads next month, when Trump is planning a new wave of tariffs, including on auto imports specifically, beginning as soon as April 2.
US car companies have pushed for an exemption for vehicles made in North America that adheres to parts-sourcing rules under USMCA.
Farley has been among the most vocal on the matter, saying last month that the tariffs would be “devastating” for American automakers and “blow a hole” in the industry.
Source : Bloomberg
