Trump Announces One-Month Exemption on Auto Tariffs Against Canada, Mexico

What Happened?

President Donald Trump announced Wednesday a one-month exemption on auto tariffs against Canada and Mexico.

The decision comes after President Trump met with the leaders of three major U.S. automakers, Ford, General Motors, and Stellantis.

White House press secretary Karoline Leavitt read a Trump statement surrounding the one-month exemption for automakers associated with the U.S.-Mexico-Canada trade agreement (USMCA).

Trump signed the trade agreement during his first presidential term.

The exemption would apply to other companies with production facilities in the three North American countries associated with USMCA.

Leavitt stated Trump was pleased to fulfill the request on behalf of the three automakers amid the pending 25% tariff measure.

The one-month delay will expire around the time Trump has pledged to implement reciprocal tariffs on all major U.S. trading partners, including allies, beginning April 2.

Leavitt said the companies should take advantage of that time to work toward the president’s goals of shifting production to the U.S. to avoid paying tariffs.

Ontario Premier Doug Ford told reporters that he and Prime Minister Justin Trudeau are on the same page with not compromising on tariffs.

Ford suggested Canada will not remove any of its retaliatory tariff measures unless all the U.S. tariffs are removed.

Why it Matters

Trump has pushed forward with 25% tariffs on all other Canadian and Mexican goods.

The actions have raised concerns about a possible trade war.

Mexico and Canada previously pledged to boost their border security efforts which prompted a previous one-month pause.

Some believe the impacts could lead to higher prices for American consumers.

Trump also doubled tariffs on Chinese imports after he amended the order, striking the words '10 percent' and inserting '20 percent' instead.

Canadian energy products would be levied at a lower rate of 10%.

The president has claimed illicit drugs are still pouring into the U.S., 'at very high and unacceptable levels.'

Prime Minister Trudeau called Trump’s actions 'a very dumb thing to do.'

Over the course of 21 days, Canada announced it would plaster tariffs on more than $100 billion of American goods.

China has implemented retaliatory measures by imposing tariffs up to 15% on a wide array of U.S. farm exports.

Mexico said it would soon announce retaliatory measures.

How it Affects You

Trump has viewed these tariff measures as 'fair' by eliminating trade imbalances.

Anticipated tariff revenues would help balance the expected $1.9 trillion budget deficit that has contributed to inflation.

China, Mexico, and Canada accounted for over 40% of U.S. imports last year, shipping $1.4 trillion worth of goods to America.

The latest adjustment in Trump’s tariff moves has many wondering what could come next.