Trump pauses new tariffs, grants US automakers one-month exemption on Canadian, Mexican imports

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 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...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... “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.