White House Announces 1-Month Tariff Delay for Automakers

Automakers will be exempted from tariffs on Canada and Mexico for one month. The request was made by the leaders of Ford, General Motors, and Stellantis.

A car hauler heads across the Ambassador Bridge between Windsor, Canada, and Detroit on the first day of President Donald Trump's new 25 percent tariffs on goods from Canada and Mexico on March 4, 2025. Bill Pugliano/Getty Images

The Trump administration is giving automakers a one-month exemption on tariffs imposed on Mexico and Canada, White House press secretary Karoline Leavitt said on March 5.

Leavitt announced the pause during a news briefing after confirming that worldwide reciprocal tariffs would still go into effect early next month.

The decision came after the heads of Ford, General Motors, and Stellantis made the exemption request during a phone call with President Donald Trump.

“We spoke with the Big Three auto dealers. We are going to give a one-month exemption on any autos coming through [the United States–Mexico–Canada Agreement (USMCA)],” she said, referring to the trade agreement among the three countries. “Reciprocal tariffs will still go into effect on April 2.

“But at 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.”

The exemption applies not only to those three Detroit-based auto manufacturers but also to any cars from Canada and Mexico that comply with the USMCA trade deal.

Many U.S. automakers rely on components that freely move across the border throughout the manufacturing process, even to make cars that are considered U.S.-made.

The move underscores the Trump administration’s efforts to establish more automobile factories in the United States, which has been one of the president’s long-term priorities. Providing a month-long delay could give the companies more time to move investments and production back into the United States.

Several U.S.-based automakers campaigned against Trump’s 25 percent tariffs on Mexico and Canada, arguing that the import taxes could increase car prices immediately because of the frequency with which components move across the border during manufacturing and assembly.

On March 4, the United Auto Workers union, which represents factory employees at the three big U.S. automakers, said it was in “active negotiations” with the Trump administration “to shape the auto tariffs in April to benefit the working class.”

“We want to see serious action that will incentivize companies to change their behavior, reinvest in America, and stop cheating the American worker, the American consumer, and the American taxpayer,” the union said in a statement.

On March 4, Trump imposed 25 percent tariffs on Canada and Mexico and an additional 10 percent tariff on China. He has repeatedly cited the three nations’ roles in fentanyl trafficking into the United States as a primary reason for the tariffs.

Trump on March 3 said there was “no room left for Mexico or for Canada” to negotiate a halt in the tariffs, even after both countries pledged efforts to stem the flow of drugs at the borders they share with the United States.

After the president followed through with his tariff promises on March 4, the Dow Jones Industrial Average dropped by 1.55 percent, or 670 points, adding to the 650-point drop of March 3.

Target CEO Brian Cornell said in a March 4 interview with CNBC that Trump’s tariffs on Mexico could force the retailer to increase prices on fruits and vegetables as soon as this week.

However, during the March 5 news briefing, Leavitt suggested that the worries over tariffs were overblown.

“I think for folks on Wall Street who may be concerned, look at what this president did for you in his first term. Wall Street boomed. [The] stock market boomed. The president expects that to happen again,” Leavitt said.

“But most importantly, Main Street is going to boom.”

She also said Trump was unlikely to give any exemptions for future tariffs, including the reciprocal tariffs that begin on April 2. Those seek to equalize U.S. trade relationships by countering other nations’ tariffs on U.S. exports with matching taxes on their exports.

“The reciprocal tariffs will go into effect on April 2, and he feels strongly about that no matter what, no exceptions,” Leavitt said.

In a pair of posts made to his social media platform, Truth Social, on March 5, Trump said he spoke with Canadian Prime Minister Justin Trudeau about the upcoming tariffs and told him that Canada wasn’t doing enough to stem the flow of fentanyl into the United States.

“Justin Trudeau, of Canada, called me to ask what could be done about Tariffs,” Trump wrote. “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.”

According to a March report from the Council on Foreign Relations, Canada “plays virtually no role in the U.S. fentanyl influx, especially compared with other countries.” The report cites data from U.S. Customs and Border Protection indicating that less than 1 percent of fentanyl found on U.S. streets comes from Canada.

By contrast, Mexico “has been the main source of fentanyl into the United States,” the report notes. Almost all of the 21,900 pounds of the synthetic opioid that U.S. law enforcement seized last year was at the southern border, compared with 43 pounds at the Canadian border. Two milligrams is considered a lethal dose of fentanyl.

A 2020 report from the Drug Enforcement Administration notes that “some fentanyl products are smuggled from Canada into the United States ... on a smaller scale,” whereas trafficking across the southern border occurs in “high-volume loads.”