There’s a mix of relief and continued frustration within the auto sector as U.S. President Donald Trump granted a one-month tariff exemption for vehicles traded under the Canada-U.S.-Mexico Agreement.
The Canadian Vehicle Manufacturers’ Association, which represents Stellantis, Ford and GM, said it “welcomes” the exemption.
“We look forward to working on a permanent solution that recognizes the integration of the North American market and reinforces the strong standards established in the USMCA/CUSMA,” the association’s president and CEO Brian Kingston said in a statement.
Global Automakers of Canada president David Adams said the one-month reprieve “is better than no reprieve” but it still leaves the industry to deal with significant uncertainty moving forward.
“A month reprieve—will that change tomorrow? This whole exercise is a little bit like trying to nail Jell-O to the wall because we’re dealing with something that is shape-shifting all the time,” said Adams, whose association represents Honda, Toyota, Volkswagen and others.
“It’s extremely frustrating for anybody just to try to figure out which end is up, and how do we make plans moving forward.”
White House press secretary Karoline Leavitt told reporters Wednesday the Big Three automakers—Stellantis, Ford and General Motors—had asked for an exemption to Trump’s 25 percent tariffs when they spoke to the president.
Leavitt said reciprocal tariffs will still go into effect April 2 but the president is granting a month-long exemption so automakers are not placed “at an economic disadvantage.”
Adams, though, said his members lack any reassurance from the temporary break due to the “myriad” of other tariffs Trump has announced, such as those on steel and aluminum imports to his country beginning March 12.
“We’re being asked to jump, but nobody is telling us how high,” he said.
Other industry representatives also expressed a sense of exasperation from the back-and-forth announcements on tariffs.
When asked for comment on Wednesday’s development, Flavio Volpe, head of the Automotive Parts Manufacturers’ Association, pointed to a post he made on social media.
“Round and round we go, where we stop, nobody knows,” he wrote.
Ford, Stellantis and GM all said Wednesday they appreciate the temporary exemption.
“We will continue to have a healthy and candid dialogue with the administration to help achieve a bright future for our industry and U.S. manufacturing,” said Ford spokesperson Said Deep in an email.
Stellantis said it supports Trump’s “determination to enable the American automotive sector to thrive,” and said it looks forward to working with him and his team.
“Under CUSMA, the automotive industry has developed an integrated manufacturing base and supply chain to support our region to be globally competitive,” said GM Canada spokesperson Jennifer Wright in an email.
Linamar executive board chair Linda Hasenfratz called tariffs the “elephant in the room.”
Speaking on a conference call discussing the auto parts manufacturer’s latest results, she said Linamar’s customers are slated to pay billions if the tariffs remain in place.
“The cost of these tariffs, notably, if steel and aluminum tariffs are layered on top, would be enormous. The cost for our customers would be in the billions and is ultimately likely to shut the industry down,” she said.
Right now it’s largely business as usual at the company’s plants with customers “continuing to pull product made in our Canadian and Mexican plants per existing production orders,” she said.
“We are waiting to see what happens next.”
For Linamar’s industrial businesses, the company has been stockpiling inventory in the U.S. for months so that customers can buy tariff-free, at least temporarily, said Hasenfratz.
Asked whether Linamar could shift some production to its U.S. facilities to help mitigate the effects of tariffs, Hasenfratz said “that just does not make sense.”
With the landscape changing several times a day, “you must focus on long term,” she said.
“That is not a premise to build a manufacturing strategy around. I mean, you’re not going to spend billions of dollars and months and months to shift production around and chase a tariff that’s here today, gone tomorrow, back the next day.”
The extension “doesn’t really change anything,” said Lana Payne, national president of Unifor, which represents workers at the major automakers known as the Detroit Three.
“The result is another month of instability in the auto industry, another month to pressure companies to move plants, another month to try to squeeze the Canadian government,” Payne said in a press release Wednesday evening.
