Trump grants a tariff delay to automakers

President Trump has granted most US automakers a one-month exemption from newly enacted tariffs on imports from Canada and Mexico “so they’re not at an economic disadvantage,” the White House announced yesterday.

The news came one day after the Trump administration’s new 25% tariffs on Canada and Mexico took effect.

• Trump’s 30-day tariff pause applies to cars that comply with the US-Mexico-Canada Agreement (USMCA), which requires vehicles to have a certain amount of parts made in North America.
• This definition covers the Big Three US automakers – Ford, GM, and Stellantis, who the White House says requested the exemption – as well as other domestic companies who import cars from Canada and Mexico.

The market reacts: Shares of major US, Asian, and European automakers rose across the board following Trump’s announcement, with Stellantis (+9%), GM (+7%), and Ford (+5%) all seeing significant closing gains.

A sign of things to come?

In a press conference explaining the move, White House Press Secretary Karoline Leavitt said Trump is “open” to hearing requests from other industries seeking similar exemptions from tariffs on Canada and Mexico. A Bloomberg report published last night indicates the agricultural industry could be next.

But…Leavitt noted Trump likely won’t allow such exemptions for future tariffs, including his reciprocal trade action scheduled for April 2 that aims to equalize US tariffs with those charged by other nations.

📸 Big picture: Trump and Canadian PM Justin Trudeau spoke yesterday afternoon about potentially easing tariffs, though there was no apparent breakthrough. In a social media post, Trump said he told Trudeau that Canada's efforts to stop the flow of fentanyl into the US aren’t yet good enough.