President Donald Trump has granted a one-month exemption on his new tariffs on imports from Mexico and Canada for U.S. automakers to safeguard the U.S. industry from potential harm amidst ongoing trade war concerns.
The exemption followed a conversation between Trump and the leaders of major U.S. automakers, including Ford, General Motors and Stellantis.
The big picture: During the discussion, Trump advised the automaker chief executives to consider relocating production from Canada and Mexico to the U.S., White House press secretary Karoline Leavitt stated.
- Canadian Prime Minister Justin Trudeau has rejected the possibility of lifting Canada’s retaliatory tariffs if Trump maintains any tariffs on Canada.
- Ontario Premier Doug Ford expressed concerns about potential job losses in the U.S. and Canada’s auto sector if the situation persists, indicating that assembly lines could shut down within approximately ten days.
- Commerce Secretary Howard Lutnick suggested the possibility of carveouts from the 25% tariffs imposed on Canada and Mexico.
What we’re watching: Trump is expected to update his tariff plans, possibly with an announcement sparing sectors such as automobiles from the import taxes.
- Additionally, he plans to announce reciprocal tariffs on April 2 to offset tariffs, taxes, and subsidies imposed by other countries.
Driving the news: The immediate aftermath of Trump’s 25% taxes on imports from Mexico and Canada led to retaliatory measures by both countries. Canada indicated its readiness to impose tariffs on over $100 billion of American goods.
- The situation has also sparked tensions with China and Mexico, with Mexico set to announce its countermeasures on Sunday. Beijing responded with tariffs on U.S. farm exports and additional restrictions on U.S. companies. The Chinese embassy to the United States expressed readiness to “fight till the end” if the U.S. initiated a trade war.
