US President Donald Trump this evening temporarily exempted materials from Mexico and Canada used by the United States (US) automotive industry from a 25 percent tariff increase on imports from those countries.
Trump's tariffs, which came into effect yesterday, prompted Canada to retaliate, triggering a tariff war between the two neighboring countries. A decision on Mexico's retaliatory measures is expected this weekend.
Trump made the decision to temporarily waive the exemption today after speaking with leaders of the "Big Three" of American automakers - Ford, General Motors and Stellantis, said White House spokeswoman Caroline Levitt.
Asked if a 30-day delay was enough to prepare the auto sector for the new tariffs, Leavitt said: "He told them to get a grip on the situation, to start investing, to start moving, to move production here to the US, where they won't pay any tariffs."
Shares of major automakers from the US, Asia and Europe jumped up to six percent after Trump's new decision.
Livit said the president is "open" to requests from other industries seeking exemptions.
The pause on tariffs on cars traded under the North American Free Trade Agreement (USMCA) only delays the broader imposition of tariffs, which take effect on April 2. On that day, Trump plans to impose "reciprocal" tariffs to match import duties, taxes and incentives in other countries.
The Republican president sees tariffs as a means to enrich the United States, but his plans have alienated American allies from the United States and sparked fears in the country of weaker economic growth and accelerating inflation.
It is unclear to allies what Trump really wants to achieve with the tariffs, as his administration cites stopping illegal immigration, stopping fentanyl smuggling, reducing the trade deficit, balancing the federal budget and forcing other countries to respect Trump more as reasons.
The US president spoke by phone with Canadian Prime Minister Justin Trudeau today after US Commerce Secretary Howard Lutnick said the idea of the Trump administration meeting Canada and Mexico "halfway" on tariffs was a "good idea".
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But Trudeau has refused to lift the retaliatory tariffs and is demanding that Trump forgo any tariffs on Canadian goods, a senior Canadian official told the AP, speaking on condition of anonymity.
"The two governments will continue to engage," Trudeau's office said.
Ontario Premier Doug Ford told the AP that the auto sector in both the US and Canada will hold out for another ten days, and then they will be forced to close plants in the US and Ontario and "people will lose their jobs."
Trump yesterday imposed a 25 percent tariff on all imports from Mexico and Canada, with a lower tariff of XNUMX percent on energy products from Canada. Trump imposed a XNUMX percent tariff on imports from China a month ago, and yesterday increased it by another XNUMX percent.
Trudeau announced retaliatory tariffs on over $100 billion worth of US goods yesterday, and they will take effect in the next 21 days.
According to Trudeau, the US has abandoned its long-standing friendship with Canada.
"Today the United States has launched a trade war against Canada, its closest partner and ally and closest friend. At the same time, they are talking about positive cooperation with Russia, appeasing Vladimir Putin, a lying murderous dictator. Now make that make some sense," Trudeau said.
Mexico announced countermeasures for Sunday, and Beijing imposed tariffs of up to 15 percent on a wide range of agricultural imports from the United States.
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