US President Donald Trump has exempted automakers from newly imposed tariffs on Mexico and Canada for a month, the White House has said. The short-term reprieve came after representations from industry leaders warned of the negative impact of tariffs on their costs and supply chains. The tariffs of 25% on goods imported from Canada and Mexico came into effect recently..
Reports suggested that in addition to supply chain turmoil for US automotive companies, the tariffs would move the prices of vehicles up by thousands of dollars in the US.
“We are going to give a one-month exemption on any autos coming through USMCA,” White House Press Secretary Karoline Leavitt stated, referring to the trade deal Trump had 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.”
A White House official said the exemption applies to auto parts that comply with the trade pact. Bloomberg reported that administration officials recently met to discuss the matter with the heads of Ford, General Motors and Stellantis. The news agency also reported that Trump spoke with Ford’s chair Bill Ford, Ford CEO Jim Farley, GM CEO Mary Barra and Stellantis Chairman John Elkann.
United States car companies have agitated for an exemption for vehicles produced in North America that abide by parts-sourcing rules under USMCA. North America’s automotive manufacturing sector is heavily integrated across international borders. Meanwhile, the Trump administration will be pushing for automakers’ commitment to moving more production from Mexico and Canada into the US.
The exemption will persist till early April when the US will implement a new round of ‘reciprocal’ tariffs that will affect imports to the US from around the world.
