Trump grants automakers 1-month reprieve from new tariffs
U.S. President Donald Trump has decided to grant automakers a one-month reprieve from his hefty new tariffs on imports from Canada and Mexico, the White House said Wednesday.
The move, announced by spokeswoman Karoline Leavitt, came after the Trump administration’s 25 percent tariffs on goods from Canada and Mexico took effect Tuesday.
Leavitt told a press briefing that Trump had spoken to Ford Motor Co., General Motors Co. and Stellantis NV earlier in the day and any car brands entering under the United States-Mexico-Canada Agreement free trade deal will be eligible for the exemption.
To qualify, automobiles will need to meet the content rules of the trade accord that include requiring 75 percent of components to be manufactured in Canada, Mexico or the United States.
Brand new Subaru cars sit in a storage lot at Auto Warehouse Co. on March 4, 2025, in Richmond, California. (Getty/Kyodo)
“The president is giving them an exemption for one month so they are not at an economic disadvantage,” Leavitt said.
U.S. and foreign automakers alike procure parts and materials from complex supply chains. They have complained that they cannot easily move the production of cars to new lines in the United States, as desired by Trump, and higher tariffs would all but certainly result in increased costs for both manufacturers and consumers.
Mexico, with its cheaper labor, was the largest exporter of passenger cars to the United States in 2024, followed by Japan, South Korea, Canada and Germany, according to the U.S. Department of Commerce.
Like their rivals, major Japanese automakers export finished vehicles to the U.S. market from plants in Canada and Mexico, also because of the three-way trade accord, which entered into force in 2020 during Trump’s first presidency.
The new tariffs were introduced based on Trump’s claim that the two North American neighbors, as well as China, are not doing enough to crack down on the smuggling of illegal drugs such as fentanyl into the United States.
On Wednesday, Trump held a phone call with Canadian Prime Minister Justin Trudeau and repeated similar criticism in a social media post afterward.
Trump said he told Trudeau that Canada’s border policies are allowing “tremendous amounts of Fentanyl, and Illegal Aliens, to pour into the United States.”
But Canada has retorted that the Trump administration is using fentanyl as a pretext for rolling out his new tariffs.
Earlier this week, Trudeau pointed out in a statement that “less than 1 percent of the fentanyl intercepted at the U.S. border comes from Canada.”
Asked about how the administration plans to deal with rising prices for various products in the United States, the White House spokeswoman said Trump is “open to hearing about additional exemptions” from other industries.
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