Trump grants 30-day tariff break to U.S. automakers
U.S. President Donald Trump is giving the auto industry a one-month break from across-the-board tariffs.
In a White House briefing Wednesday afternoon, press secretary Karoline Leavitt gave the news commerce secretary Howard Lutnick had hinted at earlier in the day.
“The President sent me out here with a statement directly from him on this … We spoke with the big three auto dealers, we are going to give a one month exemption on any autos coming through USMCA,” said Leavitt. “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.”
It was another big change for the highly integrated industry.
“Round and round we go. Where we stop, nobody knows,” said Flavio Volpe, CEO of the Automotive Parts Manufacturers’ Association.
In a morning interview on Bloomberg TV, U.S. commerce secretary Howard Lutnick said Trump would be making an announcement on whether some imports from Canada and Mexico would be getting a break from the across-the-board 25 per cent tariffs.
He specifically mentioned the highly integrated automotive industry, where some components cross the Canada-U.S. or Mexico-U.S. border several times en route to becoming a finished product.
“What he is thinking about is which sections of the market that can maybe — maybe he’ll consider giving them relief,” Lutnick told Bloomberg TV. “It could well be autos, it could be others as well.”
Industry analysts have estimated that the compounded tariffs could add several thousand dollars to the price of a finished vehicle, and have said the entire industry could grind to a halt within days if tariffs aren’t lifted.
In trading after Lutnick’s remarks, shares across the auto industry shot up.
Canada exports roughly $70 billion a year in vehicles and vehicle parts to the U.S. The only Canadian industry with more exports to the U.S. is the oil and gas sector, which accounts for roughly $160 billion per year. In the across-the-board tariffs that officially began Tuesday, Trump put a 10 per cent tariff on Canadian energy imports.
In New York, shares of GM rose five per cent by 1 p.m., while Ford rose by 3.9 per cent. In Milan, shares of Stellantis were up 4.51 per cent.
In Toronto, shares of parts manufacturers also got a lift, with Aurora-based Magna International rising 4.9 per cent and Guelph-based Linamar up by almost two per cent.
This article was first reported by The Star
