White House says pause to last for one month until reciprocal tariffs come into place on April 2
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Donald Trump’s administration will give a one-month tariff exemption to autos associated with the United States–Mexico–Canada Agreement (USMCA), White House press secretary Karoline Leavitt confirmed on Wednesday.
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“We spoke with the Big Three auto dealers; we’re going to give a one-month exemption on any autos coming through the USMCA,” she said during a White House press briefing.
“Reciprocal tariffs will still go into effect on April 2, but at the request of the companies associated with the USMCA, the president is giving them an exemption for one month so that they are not at an economic disadvantage.”
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Leavitt said Trump’s expectation is that those companies will begin moving production to the U.S. as soon as possible to avoid tariffs.
“He told them that they should get on it, start investing, start moving, shift production here to the United States of America, where they will pay no tariff,” she said. “That’s the goal.”
The decision was made following a call between Trump and automakers Stellantis NV, Ford Motor Co. and General Motors Co.
The North American automotive supply chain remains highly integrated across the U.S., Canada and Mexico. The Canadian Vehicle Manufacturers’ Association estimates parts and components may cross the Canada, U.S. and Mexican borders as much as eight times before final assembly. Half the parts and components in Canadian-built cars originate from the U.S.
Auto manufacturing also accounts for 128,000 direct Canadian jobs, with 100,000 employed in Ontario alone.
Leavitt also said “the president is open to hearing about additional exemptions; he always has open dialogue, and he’ll always do what he believes is right for the American people.”
Matthew Holmes, executive vice-president and chief of public policy at the Canadian Chamber of Commerce, doesn’t think this will be the last exemption Trump will grant.
“We’ve seen this movie before,” he said in a statement. “President Trump puts tariffs in place and then doles out exemptions one at a time. That is not how a long-lasting trade alliance is built.”
• Email: jgowling@postmedia.com
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