U.S. President Donald Trump is giving the Big Three automakers a one-month exemption from sweeping tariffs he imposed on Canada and Mexico, the White House confirmed Wednesday.
The exemption came after Trump held a call earlier Wednesday with representatives of Stellantis, Ford and General Motors at the request of the companies, which rely on North American production lines enshrined in the United States-Mexico-Canada Agreement (USMCA).
“We are going to give a one-month exemption on any autos coming through USMCA,” White House Press Secretary Karoline Leavitt said, reading from a statement she attributed to Trump.
“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.”
Leavitt told reporters the reprieve was meant to give those companies time to shift investments to the U.S. Trump has repeatedly said he wants to boost the domestic auto manufacturing sector, using tariffs to move away from free trade routes.
“He told (the Big Three companies) 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,” she said.
She added Trump was open to additional exemptions to the 25 per cent tariffs imposed Tuesday on Canada and Mexico, when asked specifically about boosting egg imports to counter bird flu-related supply issues.
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But she said there would be “no exemptions” to Trump’s so-called reciprocal tariffs set to begin on April 2, which seek to match tariffs put on U.S. goods by other countries.
U.S. Commerce Secretary Howard Lutnick had hinted Tuesday at a potential deal that would see Trump, Canada and Mexico “meet in the middle” on tariffs but not remove them entirely.
Earlier Wednesday, he told Bloomberg News that deal would likely mean carve-outs for automakers under the USMCA, which sets requirements for rates of U.S. products to be used in vehicle manufacturing.
“If you complied with the agreement, then maybe you avoid tariffs, and if you didn’t comply with the agreement, well, you did so at your own risk,” Lutnick said.
Ontario Premier Doug Ford, whose province’s auto sector includes the Big Three automakers, said he was wary of a temporary reprieve.
“That always concerns me, when someone says ‘give us 30 days as we ramp up to start moving south of the border.’ That’s unacceptable,” he told reporters in Toronto.
“We need certainty. Businesses need certainty across the board.”
Ford warned on Tuesday that the auto industry could shut down entirely in a matter of days due to cost increases from tariffs on parts and components.
More to come…
