The White House on Wednesday announced a one-month tariff exemption for automakers after President Donald Trump spoke a day earlier with heads of General Motors, Ford Motor and Stellantis.
Automakers have urged Trump to waive 25% tariffs on Mexico and Canada on vehicles that comply with the United States-Mexico-Canada Agreement’s rules of origin.
“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,” Press Secretary Karoline Leavitt said on behalf of Trump.
Leavitt confirmed the automakers requested the Tuesday call with Trump, who mentioned it during his address to Congress later in the day.
The White House said it granted a one-month delay for tariffs on automakers whose cars comply with USMCA, which was negotiated under Trump’s first term in office.
Shares of those automakers were up between 4% and 9% early Wednesday afternoon.
It was not immediately clear whether just vehicles will be exempt, or if automotive parts would also be included.
The exemption allows for additional preparation and discussions between the White House and automotive industry on tariffs. It also more closely aligns with potential vehicle tariffs on imports from outside of North America.
Trump previously said those tariffs would be confirmed on April 2, in a push for automakers to invest more in the U.S. for vehicle production.
The American Automotive Policy Council, which represents Ford, GM and Stellantis — all of which are heavily affected by the tariffs — earlier this week argued that vehicles and parts that meet USMCA requirements should be exempt from the tariff increase.
“Our American automakers, who invested billions in the U.S. to meet these requirements, should not have their competitiveness undermined by tariffs that will raise the cost of building vehicles in the United States and stymie investment in the American workforce, while our competitors from outside of North America benefit from easy access to our home market,” said former Missouri Gov. Matt Blunt, president of AAPC, in a statement Monday night.
S&P Global Mobility reports 25 automakers on average produce 63,900 light-duty passenger vehicles in North America per day. A majority of those, roughly 65%, are assembled in the U.S., followed by 27% in Mexico and 8% in Canada.
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