CNN reported that on March 5, White House Press Secretary Karoline Leavitt said that US President Donald Trump had granted a tariff exemption for cars from Mexico and Canada for one month. Although the decision is only temporary, it is seen as a significant concession move by Mr. Trump.
Mr. Trump has agreed to a delay to ensure that three US automakers are not financially affected, including Ford, General Motors (GM) and Stellantis, after negotiating with them. However, all other 25% tariffs on Mexico and Canada remain in effect
Speaking at a daily press conference, Ms. Leavitt said: Under the proposal of USMCA-related companies, the president will exempt tariffs for one month so that they do not suffer an economic disadvantage. The USMCA is a free trade agreement signed during Trump's first term between the United States, Mexico and Canada.
According to Ms. Leavitt, automakers should take advantage of the one-month tax delay to move towards President Trump's goal of bringing the US auto industry back into the country. They should get to work right away, start investing, and shift production to the US, the White House Press Secretary quoted Trump as saying.
However, CNN still believes that this is a difficult prospect to happen because producers need to make a lot of effort in mass recruitment, strong investment and long-term strategic planning.
On the side of automakers, Ford and GM welcomed Mr. Trump's decision, pledging to continue dialogue with the government. Ford appreciates the tariff exemption for companies complying with the USMCA, while GM said it has invested more than $60 billion in US manufacturing and will continue to expand.
The Trump exemption decision comes ahead of a global counterpart tax plan, which is expected to be announced on April 2, according to CNN. Unlike tariffs on Mexico and Canada goods, Trump will not consider any exceptions to upcoming counterpart tariffs, Leavitt said.
These tariffs may also be applied in parallel with the 25% tax still in effect on other goods from Canada and Mexico. In an interview with Fox News last week, US Secretary of Commerce Howard Lutnick mentioned Canada's 5% sales tax when discussing the counterpart tariffs that Trump may be considering.
