The United States will temporarily delay tariffs on automobiles imported from Mexico and Canada.
President Donald Trump would exempt automakers from 25% tariffs on Canada and Mexico for one month if they comply with an existing free trade agreement, the White House said on Wednesday.
News of the exemption from tariffs, that came into effect on Tuesday, lifted auto makers' share prices.
White House spokesperson Karoline Leavitt said the exemption through the United States-Mexico-Canada Agreement (USMCA) was granted at the request of Ford Motor Company (NYSE: F), General Motors (NYSE: GM) and Stellantis (BIT: STLAM).
Leavitt read a statement from Trump to a news conference: “We spoke with the big three auto dealers. We are going to give a one-month exemption on any autos coming through USMCA.
“Reciprocal tariffs will still go into effect on April 2. We have 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.”
Vehicles made by Ford, GM and Stellantis comply with the USMCA's complex rules that require 75% North American content to get duty-free access to the U.S. market.
The tariffs, which apply as goods enter a country, were forecast to affect one third of car production in North America within a week, according to analysts at S&P Global Mobility.
Trump wrote on his Truth Social platform that he spoke by phone to Canadian Prime Minister Justin Trudeau about tariffs, which he had imposed partly in response to the flow of drugs like the powerful synthetic opioid analgesic Fentanyl into the United States.
“I told him that many people have died from Fentanyl that came through the borders of Canada and Mexico, and nothing has convinced me that it has stopped. He said that it’s gotten better, but I said, “That’s not good enough.” The call ended in a “somewhat” friendly manner!” the U.S. President wrote in his post.
Share prices responded with Ford Motor Company (NYSE: F) rising 52 cents (5.75%) to US$9.65 (A$15.31), General Motors (NYSE: GM) adding $3.26 (7.22%) to US$48.48 and Stellantis (BIT: STLAM) adding 0.5 Euros (4.51%) to 11.58 Euros.
