Ford, GM, Stellantis Get Temporary Exemption from Trump’s 25% Tariffs

The Trump administration has granted Ford, GM, and Stellantis a one-month exemption from the newly imposed 25% tariffs on imports from Canada and Mexico, specifically for vehicles that comply with the United States-Mexico-Canada Agreement (USMCA). The exemption, which lasts until April 2, comes after concerns that the tariffs, which took effect on March 5, would significantly raise production costs and new car prices. The decision followed discussions with executives from the three automakers, including Ford CEO Jim Farley, Chairman Bill Ford, GM CEO Mary Barra, and Stellantis Chairman John Elkann, who personally requested the delay from Trump.

he administration has not clarified whether the exemption covers only vehicles or also includes auto parts, but experts believe automakers will struggle to restructure supply chains within the short 30-day window. Trump has urged manufacturers to move production to the U.S. to avoid tariffs altogether. This marks the second delay in implementing the tariffs, following a previous 30-day pause that ended on March 4. Unlike the earlier delay, this exemption applies only to automakers compliant with USMCA regulations. Analysts warn that if the tariffs are fully enforced, new car prices could rise by $1,000 to $9,000.

Ford, GM, Stellantis Get Temporary Exemption from Trump’s 25% Tariffs

The three major U.S. automakers—Ford, General Motors, and Stellantis—have been granted a temporary exemption from the newly imposed 25% tariffs on imports from Canada and Mexico. Vehicles that comply with the United States-Mexico-Canada Agreement (USMCA) will not be subject to the tariffs until April 2, giving manufacturers additional time to prepare.

The tariffs, which officially took effect on March 5, have raised concerns about potential spikes in production costs and vehicle prices. However, the White House announced that automakers operating under the USMCA framework would receive a 30-day grace period before the tariffs apply.

“We had discussions with the Big Three automakers and have decided to grant them a one-month exemption on vehicles covered under USMCA. However, reciprocal tariffs will still take effect on April 2. This decision was made at the request of these companies to ensure they are not at an economic disadvantage,” stated White House press secretary Karoline Leavitt during a briefing.

Ford, GM, and Stellantis executives, including Ford CEO Jim Farley, Chairman Bill Ford, GM CEO Mary Barra, and Stellantis Chairman John Elkann, reportedly spoke with former President Trump directly to request the exemption, according to CNBC.

While the White House did not clarify the exact scope of the exemption, it is expected to include both vehicles and auto parts. However, the short timeline makes it unlikely that automakers will be able to significantly restructure their supply chains within 30 days. When asked about this challenge, Leavitt noted that Trump encouraged automakers to “start investing and shifting production to the United States, where they won’t face tariffs. That’s the ultimate goal.”

This marks the second time the Trump administration has delayed the implementation of the 25% tariffs. An earlier 30-day pause, agreed upon in February, expired on March 4. Unlike that previous delay, the latest exemption applies only to manufacturers compliant with USMCA regulations.

If the tariffs do take full effect, analysts warn they could substantially increase production costs and lead to price hikes for new vehicles, with estimates ranging from $1,000 to $9,000, according to the Detroit Free Press. These added costs would likely be passed on to consumers, making cars less affordable and potentially slowing demand. Automakers may also struggle to absorb the financial burden, leading to possible job cuts, supply chain disruptions, and shifts in manufacturing locations to mitigate losses.