Trump grants 30-day reprieve on auto tariffs, trade war escalates

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Karah Rucker Anchor

By Karah Rucker (Anchor), Shea Taylor (Producer), Jake Larsen (Video Editor)

President Donald Trump granted a one-month exemption to major U.S. automakers from 25% tariffs on imports from Canada and Mexico, following urgent requests from Ford, GM, and Stellantis. The tariffs, imposed to curb illegal immigration and drug trafficking, would disrupt supply chains and increase vehicle costs.
The exemption applies to vehicles complying with the 2020 USMCA, mandating 40-45% North American content and $16/hour worker wages.
Canada and Mexico plan retaliatory tariffs, targeting key U.S. exports, while the auto industry warns of potential plant closures and job losses if tariffs resume.

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President Donald Trump agreed to a one-month exemption for major U.S. automakers from newly imposed 25% tariffs on imports from Canada and Mexico. The temporary reprieve, announced Wednesday, March 5, followed urgent requests from Ford, General Motors and Stellantis, which argued that the tariffs would disrupt supply chains and increase vehicle costs.

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The decision comes just two days after the tariffs took effect, triggering a sharp response from Canada and Mexico.

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Canadian Prime Minister Justin Trudeau announced retaliatory tariffs on over $100 billion in U.S. goods, while Mexican President Claudia Sheinbaum will unveil countermeasures on Sunday, March 9.

What impact do the tariffs have on the auto industry?

Trump’s tariffs, originally justified as a measure to curb illegal immigration and drug trafficking, would significantly increase the cost of North American auto production. Industry analysts estimated that without an exemption, the tariffs could add more than $10,000 to the price of a new car.

The tariffs apply to all imports from Canada and Mexico, affecting vehicles and auto parts that cross borders multiple times during manufacturing. Auto executives warned that the added costs would give European and Asian automakers a competitive advantage, leading to potential plant closures and job losses in the U.S.

Flavio Volpe, president of the Automotive Parts Manufacturers’ Association in Toronto, said the tariffs put the industry “on the edge of crisis,” and Trump’s temporary exemption is simply pulling back from “the brink.”

How did automakers secure an exemption?

The exemption applies to vehicles that comply with the 2020 United States-Mexico-Canada Agreement (USMCA), which mandates that 40-45% of a car’s content be sourced from North America and that workers earn at least $16 per hour. Trump agreed to the temporary relief after a phone call with auto executives, though he also urged them to shift more production to the U.S.

The move temporarily spares American automakers from severe disruptions, but uncertainty remains. Commerce Secretary Howard Lutnick said Wednesday that the administration could announce additional tariff exemptions for other industries in the coming days.

What are Canada and Mexico doing in response?

Trudeau confirmed that Canada will impose retaliatory tariffs over the next three weeks, targeting key U.S. exports. Mexico has yet to announce specific measures, but Sheinbaum indicated her government will respond decisively.

The White House framed the tariffs as a tool to pressure Canada and Mexico into taking stronger action against illicit fentanyl trafficking and unauthorized migration. However, both countries argued they have already strengthened border enforcement.

Trump, posting on Truth Social, dismissed Trudeau’s efforts as “not good enough,” adding that his phone call with the Canadian leader ended in a “somewhat” friendly manner.

What happens next?

The auto industry’s relief may be short-lived. The tariff exemption expires on April 2. That’s when Trump may unveil a new round of “reciprocal” tariffs.

If the auto tariffs resume, industry leaders warn that plant closures and job losses could follow.

Financial markets reacted positively to the temporary reprieve, with stocks of General Motors, Ford and Stellantis rising sharply. But economists caution that continued trade uncertainty could slow economic growth and complicate the Federal Reserve’s inflation-control efforts.

Tags: Auto industry, Automakers, Canada, Mexico, Tariff, Tariffs, U.S.-Mexico Border, United Auto Workers

karah rucker

AS PRESIDENT TRUMP’S 25 PERCENT TARIFFS ON CANADA AND MEXICO SETTLE IN — HE’S OFFERING THREE OF THE U-S’ BIGGEST AUTOMAKERS A MONTH-LONG REPRIEVE.
THE STOCK MARKET SURGED WEDNESDAY AFTER THE TRUMP ADMINISTRATION GRANTED A 30-DAY TARIFF-EXEMPTION UPON REQUEST FROM THE BIG THREE U-S AUTOMAKERS — FORD, GENERAL MOTORS AND STELLANTIS, WHICH IS THE PARENT COMPANY OF JEEP AND CHRYSLER.

WHITE HOUSE PRESS SECRETARY KAROLINE LEAVITT SAYS PRESIDENT TRUMP IS ALSO OPEN TO PROVIDING ADDITIONAL EXEMPTIONS FOR OTHER COMPANIES.

THE TARIFFS ARE MEANT TO ADDRESS DRUGS FLOWING INTO THE U.S. FROM MEXICO AND CANADA — AND ILLEGAL BORDER CROSSINGS.

CANADIAN PRIME MINISTER JUSTIN TRUDEAU HAS SAID HIS COUNTRY HAS PUT POLICIES IN PLACE TO ADDRESS THOSE ISSUES… BUT IN POSTS ON HIS TRUTH SOCIAL PLATFORM — PRESIDENT TRUMP SAID THOSE EFFORTS WERE QUOTE “NOT GOOD ENOUGH” TO CONVINCE HIM TO LIFT THE TARIFFS.
ON TUESDAY — TRUDEAU SAID CANADA WILL IMPOSE ITS OWN TARIFFS ON MORE THAN 100 BILLION DOLLARS OF AMERICAN GOODS OVER THE COURSE OF 21 DAYS.

MEXICAN PRESIDENT CLAUDIA SHEINBAUM INDICATED WEDNESDAY HER COUNTRY’S COUNTERMEASURES WOULD BE ANNOUNCED ON SUNDAY.

AND PRESIDENT TRUMP — DURING HIS ADDRESS TO CONGRESS TUESDAY — PROMISED **RECIPROCAL TARIFFS IF THE COUNTRIES DECIDE TO DO SO.