President Donald Trump has decided at the urging of automakers to delay for a month a portion of the 25 percent tariffs he imposed on Canada and Mexico, the White House said Wednesday.
The reprieve will apply to all auto manufacturers operating in North America under the U.S.-Mexico-Canada trade agreement signed by the three nations during Trump’s first administration, the White House said.
“We spoke with the Big Three auto dealers,” White House spokesperson Karoline Leavitt told reporters. “We are going to give a one-month exemption on any autos coming through [the U.S.-Mexico-Canada Agreement].”
The White House made it clear that its decision, which sent the stock market surging a day after a sharp sell-off sparked by the imposition of the tariffs, did not mean an end to the president’s abrupt decision to launch what amounts to a trade war with the country’s two largest trading partners in part to pressure them to do more to halt illicit shipments of fentanyl.
Auto trade between the United States, Canada and Mexico accounts for a large share of U.S. trade with those countries, which totaled $1.6 trillion last year. U.S. auto trade with its neighbors totaled about $345 billion, including $120 billion with Canada and $225 billion with Mexico.
Many of the vehicles and auto parts made in Canada and Mexico enter the United States duty-free under the USMCA.
Leavitt stressed that Trump still plans to proceed April 2 with “reciprocal tariffs,” imposing levies on goods from countries around the world viewed as unequal trading partners by the administration.
Trump is giving automakers “an exemption for one month so they are not at an economic disadvantage,” Leavitt said.
A month may not buy enough time to adjust for vehicle makers and manufacturers that have become increasingly interdependent in recent decades.
