President Donald Trump has announced a one-month delay on auto tariffs for Mexico and Canada, following pressure from major US automakers.
The decision, confirmed by White House Press Secretary Karoline Leavitt, offers temporary relief for automakers like Ford, General Motors, and Stellantis, which were concerned that the tariffs could harm their financial positions.
The tariffs, which are still set to go into effect, were initially part of Trump's plan to address trade imbalances under the US-Mexico-Canada Agreement (USMCA).
According to CNN, Leavitt stated that the exemption would allow automakers to avoid economic disadvantages while they work toward Trump's broader goal of bringing more auto production to the US.
"At the request of the companies associated with USMCA, the president is giving them an exemption for one month so they're not at an economic disadvantage," she explained.
This move follows a meeting between Trump and executives from the Big Three automakers, which include Ford, General Motors, and Stellantis.
Despite the reprieve, the 25% tariffs on auto imports from Mexico and Canada remain in effect. Trump has urged the companies to use the delay to move production to the U.S., a plan that could require extensive investments and long-term changes in manufacturing strategy.
"He told them they should get on it, start investing, start moving, shift production here to the United States of America, where they will pay no tariff. That's the ultimate goal," Leavitt added.
Automakers have expressed appreciation for the temporary exemption. Ford, in a statement, said it would continue working with the administration to address issues facing the industry.
"We appreciate President Trump's work to support our industry and exempt auto companies complying with USMCA," the company said. Similarly, General Motors thanked Trump for creating conditions that allow US automakers to remain competitive.
Trump just chickened out on auto industry tariffs. He is reportedly putting them on ice for a month.
— Beefeater (@Beefeater_Fella) March 5, 2025
Once a bone spurs coward, always a coward.
He buckles under Canada and Mexico standing up for themselves.https://t.co/aIg5Z1dxQo pic.twitter.com/MrEF4WuBBZ
Trudeau and Ford Unite in Opposition to US Auto Tariffs, Vow to Resist
On the other hand, Canada has voiced its concerns. Ontario Premier Doug Ford and Canadian Prime Minister Justin Trudeau have both stated their opposition to any tariffs on their goods.
Ford reiterated that both he and Trudeau are firmly against such trade barriers, saying, "We're on the same page, zero tariffs and we are not going to budge."
Trump's delay on the tariffs also comes ahead of his planned introduction of reciprocal tariffs, which are scheduled to be announced on April 2, NY Post said.
These tariffs could target countries imposing fines, subsidies, and tariffs on US goods and services, with potential impacts on a variety of industries, including agriculture.
The move also highlights the complex relationship between US trade policies and the auto supply chain in North America.
US automakers depend on parts from both Mexico and Canada, meaning that tariffs on these imports could raise production costs for vehicles assembled in the US This would give foreign automakers a significant competitive advantage, as they would not face the same tariffs on vehicles imported from plants outside of North America.
The temporary delay has had an immediate effect on the stock market, with automakers seeing significant gains. Ford shares rose 5.75%, while Stellantis and GM saw increases of 9.24% and 7.22%, respectively.
Join the Conversation