President Donald Trump is granting a one-month exemption on his stiff new tariffs on imports from Mexico and Canada for U.S. automakers, as worries persist that the newly launched trade war could crush domestic manufacturing.
The pause comes after Trump spoke with leaders of the “big 3” automakers, Ford, General Motors and Stellantis, on Wednesday, according to White House press secretary Karoline Leavitt.
Asked if 30 days was enough for the auto sector to prepare for the new taxes, Leavitt said Trump was blunt with the automakers seeking an exemption: “He told them that they should get on it, start investing, start moving, shift production here to the United States of America where they will pay no tariff.”
Shares of big U.S., Asian and European automakers jumped as much as 6% after the announcement.
Pausing the 25% taxes on autos traded through the North American trade pact USMCA would only delay a broader reckoning to take place on April 2, when Trump is set to impose broad “reciprocal” tariffs to match the taxes and subsidies that other countries charge on imports.
Leavitt said the president is “open” to hearing requests from other industries seeking exemptions as well.
The White House repeatedly insisted that it would not grant exemptions and the sudden turnaround reflects the economic and political problems being created by Trump's day-old tariffs. While the Republican president sees them as enriching the United States, his plans to tax imports have alienated allies and caused anxiety about slower economic growth and accelerating inflation.
Trump has long promised to impose tariffs, but his opening weeks in the White House have involved aggressive threats, surprise suspensions and allies unclear at what the U.S. president is actually trying to achieve. Based off various Trump administration statements, the tariffs on Canada, Mexico and China imposed on Tuesday are about stopping illegal immigration, blocking fentanyl smuggling, closing the trade gap, balancing the federal budget and other nations showing more respect for Trump.
The U.S. president engaged in a phone call on Wednesday with Canadian Prime Minister Justin Trudeau, as U.S. Commerce Secretary Howard Lutnick had suggested that the administration was looking to meet Canada and Mexico “in the middle.”
But Trudeau refused to lift Canada’s retaliatory tariffs so long as Trump continues with his new taxes on imports from Canada, a senior government official told The Associated Press. The official confirmed the stance on condition of anonymity as they were not authorized to speak publicly on the matter.
“Both countries will continue to be in contact today,” Trudeau’s office said.
Ontario Premier Doug Ford earlier told The AP that the auto sector in the U.S. and Canada would last approximately 10 days before they start shutting down the assembly lines in the U.S. and in Ontario.
“People are going to lose their jobs,” he said.
The prospect of a trade war appears to be an ongoing feature of the Trump administration, rather than a brief skirmish. In addition to his upcoming reciprocal tariffs that could strike the European Union, India, Brazil, South Korea, Canada and Mexico, Trump wants to tax imports of computer chips, pharmaceutical drugs and autos. He also closed exemptions on his 2018 steel and aluminum tariffs and is investigating tariffs on copper as well.
Tariffs are taxes paid by importers in the countries receiving the goods, so the cost could largely be passed along to U.S. consumers and businesses in the form of higher prices. In his Tuesday night speech to a joint session of Congress, Trump tried to minimize the financial pain as a “ little disturbance.”
“It may be a little bit of an adjustment period,” he said after claiming that farmers would benefit from reciprocal tariffs on countries that have tariffs on U.S. exports. “You have to bear with me again and this will be even better.”
The U.S. president has predicted that tariffs will lead to greater investment inside the United States, creating more factory jobs and boosting growth in the long term.
On Tuesday, Trump put 25% taxes on imports from Mexico and Canada, taxing Canadian energy products such as oil and electricity at a lower 10% rate. The president also doubled the 10% tariff he placed on China to 20%.
The administration has claimed that the tariffs are about stopping the smuggling of drugs such as fentanyl, with aides asserting that this is about a “drug war” rather than a “trade war.” U.S. customs agents seized just 43 pounds (19.5 kilograms) of fentanyl at the northern border the last fiscal year.
Trudeau said on Tuesday that his country would plaster tariffs on over $100 billion (U.S. dollars) of American goods over the course of 21 days, stressing that the United States had abandoned a long-standing friendship.
“Today, the United States launched a trade war against Canada, their closest partner and ally, their closest friend. At the same time, they are talking about working positively with Russia, appeasing Vladimir Putin, a lying, murderous dictator. Make that make sense,” Trudeau said on Tuesday.
Mexico indicated it would announce its own countermeasures on Sunday.
Beijing responded with tariffs of up to 15% on a wide array of U.S. farm exports. It also expanded the number of U.S. companies subject to export controls and other restrictions by about two dozen.
“If war is what the U.S. wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end,” China’s embassy to the United States posted on X on Tuesday night.
In response to China, U.S. Defense Secretary Pete Hegseth told Fox News Channel’s “Fox & Friends” that the United States is “prepared” for war against the world's second largest economy.
“Those who long for peace must prepare for war,” Hegseth said Wednesday morning. "If we want to deter war with the Chinese or others, we have to be strong."
© Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
45 Comments
Underworld
On again, off again.
This is getting ridiculous.
I'veSeenFootage
Of course he backtracks as soon as he sees the markets crash because of his own stupid ideas. So he's dumb AND cowardly.
Bob Fosse
“other nations showing more respect for Trump.”
It’s not working. 4 years is a long time but in the grand scheme of things whatever he does will be undone.
Yrral
Nobody gonna import cars ,into the US if they are made for the local market
GuruMick
"Trump Crumble " a new dessert on offer in Canada.
bass4funk
Well, you just re-adjust accordingly, nothing new, nothing monumentally changed, dumb and cowardly as well as being incompetent would be to allow our allies to further take advantage of the U.S.
Samit Basu
Does that mean "Made In Mexico" Japanese brand vehicles for brands like Toyota and Nissan get hit with 25% tariff since the exemption only mentions US automakers?
deanzaZZR
Trump is on a power trip. Trump has been crossed off many Christmas Card lists for this behavior.
MarkX
Do these fools think that in a month that the US auto industry can build and man factories producing all the parts and cars that are needed? What does a month do? Nothing, but as mentioned above, when the markets are crashing they must retreat! But Maga will claim Trump won!
stormcrow
Everyone is playing three-dimensional chess and here's Donald Trump struggling over a simple game of checkers. Looking forward to the day when everybody wakes up to the fact that this president is way out of his intellectual depth.
Canucksfan
First of all, he’s snaking out of the USMCA free trade agreement the HE agreed to 5 years ago. Tells you what kind of a man he is.
Secondly, he’s willing to put Americans and other countries in financial hardship AND destroy a longstanding amicable relationship with his neighbors just to offset his tax cuts… because, let’s face it: He’s only doing this to create revenue, and not for any other reason.
JboneInTheZone
You do realize Trump signed the most recent trade deal during his first term with Mexico and Canada, right?
Is he so dumb that he drafted and signed a trade deal that allowed Allie’s to take advantage of us?
Tokyo Guy
Well, you just re-adjust accordingly, nothing new, nothing monumentally changed, dumb and cowardly as well as being incompetent would be to allow our allies to further take advantage of the U.S.
It's fun to watch you try and rationalise every single stupid thing he does.
Psychology textbooks of the future will have an entire chapter on the cognitive dissonance of the MAGA movement.
itsonlyrocknroll
The cost of living crisis proves consumption reverts to essential need when prices become unsustainable.
Some, I suggest most of our local supermarkets busy hours, especially for fresh food/veg are between discount periods. late evenings.
My local Sunshine depatches "staff" to discount seafood/fish/sashimi/sushi first, almost clock work.
Staff numbers have decreased, as auto checkouts have increased.
Retail will adjust, removing products that become considered price restrictive "unsaleable".
I grow close to 80% of my season friendly fruit/veg.
Even so some of the "discounted" supermarket fruit and veg is price friendly, to my homegrown.
JboneInTheZone
Just a reminder for everyone: the Trump steel tariffs of 2018 only resulted in around 1000 jobs saved within the steel industry but caused the loss of an estimated 75,000 jobs in industries that used steel due to increased prices downstream.
bass4funk
Hardly
XCAndtheband
Trump: “You better do whatever I want or else I’m gonna count to 3…”
Everyone else: “Try it and we’ll fight back.”
Trump: “1…2……”
Everyone else: puts on gloves and raises fists
Trump: nervously “…2 and a haaalfff….”
JeffLee
If tariffs are so wonderful, what's the point in delaying them? Maybe, hopefully, this is a sign he's softening.
lincolnman
This Moron's tariffs will wreck the auto industry, will decimate farmers, and make everyday living miserable for the average MAGA little guy...
Of course, he and his tech bro buds will do just fine...
MAGA-world - Trump gets the goldmine, everyone else gets the shaft...
I'veSeenFootage
No, dumb and cowardly as well as being incompetent would be to shun your historical allies in order to let Russia take advantage of the US.
diobrando
Again and again, a kid playing yoyo all the time. Mexico has much power that he thinks and could strongly impact US economy.
Gorramcowboy
This rebuttal comment wins the internet the internet for the next four years.
WoodyLee
""He told them that they should get on it, start investing, start moving, shift production here to the United States of America where they will pay no tariff.”"
Well Done Sir.
Bring it back home to the people that are BUYING it, and stop the GREED.
Yrral
Trump Recession
lincolnman
Best laugh of the morning...
"House Speaker Mike Johnson's chief of staff arrested after Trump speech on DUI charge"
https://www.yahoo.com/news/house-speaker-mike-johnsons-chief-220450466.html
Trump's speech was so bad, Repubs went out and got drunk afterward, then tried to drive home...
"Lock Him Up!".....ROFL...
RichardPearce
But didn't he say yesterday that the American automates were THRILLED with his 'tariffs'?
PS, to 'shift production' they'll have to
1) buy land and build factory buildings on it, or rent land with factory buildings on it and renovated them.
2) purchase and install specialized machinery to make whatever specific parts they're replacing
3) train a workforce on those machines, renegotiate contracts with suppliers and freight companies to send stuff to and from a different location than on present contracts
4) shut down and clear out the existing factories, paying penalties or continuing to pay fees for the unused space.
Oh, and because the usual timeline for starting up a new production facility is on the order of 3 or more years, they'll have to pay the 'triple priority prices' for EVERYTHING to get it done by April Fools Day 2026.
HopeSpringsEternal
DJT Admin's strategy is to get Mexico & Canada to better align their tariff policy with US in order to strengthen USMCA, eliminating tariff 'arbitrage' of the trade block by outside countries, especially, EU, China & Far East
stickman1760
It finally dawned on the Orange buffoon that Ford and GM are American companies. Impressive.
wtfjapan
Well, you just re-adjust accordingly,
cultism speak for IDK WTF is going on either but I shouldnt question my leader no matter how crazy things get. and no the dems never did anything near as damaging tothe economy as what Trump is doing.
but hey its keeping the tradition alive of recession being the trait of republcians. get this if a recession hits which is more likley than not, itll be the 11 of the last 12 recession to happen under a republcian president. no that isnt coincidence
wtfjapan
Well, you just re-adjust accordingly,
cultism speak for IDK WTF is going on either but I shouldnt question my leader no matter batshite crazy things get. and no the dems never did anything near as damaging tothe economy as what Trump is doing.
but hey its keeping the tradition alive of recession being the trait of republcians. get this if a recession hits which is more likley than not, itll be the 11 of the last 12 recession to happen under a republcian president. no that isnt coincidence
Chabbawanga
Expect more flip-flopping as the US falls into a recession. Ofc it isnt all down to Trump, but his bully tactics will be the catalyst.
ok1517
Once again paddling back!
But don't trust him!
He wants everything his way, benefitting him, his clan, and admirers!
And in exchange for that temporary "grant" he's now blackmailing other countries!
The inciter, divider-in-chief, insulter, cheater doing only what he's good at!!
ian
Call him what you want but he outwitted everyone and won didn't he
Hercolobus
The expression shooting yourself in your own foot has resonance.
HopeSpringsEternal
Many markets have VERY high auto tariffs, especially China and India. EU recently cut their auto tariffs on US cars by 75%, DJT simply taking into account global auto market, and pressuring industry to build in US = SMART
rainyday
His own voters most of all.
ian
Didn't he face the full might of the previous US administration?
kwatt
Only one-month exemption! Can't do anything Trump wants. It takes a couple of years at least.
Nifty
Often said by doctors before they chop off a body part. The whole tariffs with allies thing is super moronic.
Cephus
President DJT is smart and courageous enough to take those bold steps. But that won't stop parrots from cackling Putin, Putin. I bet Putin is the worst far left nightmare
Deo Gratias
It did?
Then what of this article from nearly a month ago?
https://www.reuters.com/markets/commodities/trump-consider-exemption-australia-steel-tariffs-pm-says-2025-02-10/
Or this, which specifically mentions the possible granting of certain industry exemptions?
https://www.whitecase.com/insight-alert/president-trump-expands-steel-and-aluminum-tariffs-all-countries-effective-march-12
Or this, from that media bastion of right-wing propaganda called CNN?
https://edition.cnn.com/2025/02/07/business/de-minimis-loophole-tariffs-trump/index.html
Deo Gratias
It hasn't just been predicted; it's already starting.
Just to illustrate one example of many that could be shown:
https://www.local3news.com/local-news/volkswagen-said-to-be-weighing-production-for-audi-porsche-vehicles-in-us/article_5ef653d4-de76-11ef-aa59-c7a3be4103ff.html
From the article:
German automaker Volkswagen is said to be considering the building of both Audi and Porsche vehicles in the United States, according to recent reports.
Several Volkswagens for customers in the United States are built in Chattanooga, and wouldn't be subject to the proposed tariffs from the Trump administration.
But Audi and Porsche vehicles are assembled in other countries, such as Europe and Mexico.
German daily newspaper Handelsblatt says that both Audi and Porsche divisions could benefit from vehicle production of some products at the Chattanooga site as a way to avoid the tariffs.
bass4funk
Wait! The Dems have a better answer? Ohhh, that's right they don't because they just cancel and feed their pet projects through our tax money, they don't solve problems they create them, that is why they lost everything.
Again, the Dems have no answer, so I would suggest, the Dems come up with real solutions and apply that to their list of new policies, run and pray that people will give them a second chance, because as of now they have none.
Jind
Nothing changes in a month.
Does Trump think that car manufactures will move their operations in a month? NO.
It's kids playing with matches in the White House.
BB
He may be thinking there will be a bump in buying as consumers try to get ahead of the tariff impact -- and he can use that to show how great he's doing. Very short-term thinking, if so.