Trump Grants Temporary Tariff Exemption to Big Three Automakers—But Uncertainty Remains

U.S. President Donald Trump has granted a one-month exemption from tariffs on Canadian and Mexican auto imports for Ford, GM, and Stellantis following a request from the automakers, who rely on USMCA trade agreements. White House Press Secretary Karoline Leavitt stated that the exemption allows companies time to shift investments to the U.S., but emphasized that reciprocal tariffs will still take effect on April 2 with no further exemptions planned. Ontario Premier Doug Ford and Prime Minister Justin Trudeau rejected partial compromises, insisting on a complete removal of tariffs.

Industry leaders warn that the tariffs could disrupt supply chains and potentially cause shutdowns, while the Canadian Vehicle Manufacturers’ Association welcomed the temporary relief but called for a long-term solution. Adding further strain, additional 25% tariffs on steel and aluminum will take effect on March 12. Trump argues that his policies will revitalize U.S. auto manufacturing and reduce reliance on imports. Meanwhile, the Canadian government has invested billions to attract automakers, particularly in electric vehicle and battery production. While the exemption provides temporary relief, uncertainty over long-term trade policies continues to loom over the industry.

Trump Grants Temporary Tariff Exemption to Big Three Automakers—But Uncertainty Remains

U.S. President Donald Trump has granted a temporary one-month exemption from newly imposed tariffs on Canadian and Mexican auto imports for the Big Three automakers—Ford, General Motors, and Stellantis—the White House confirmed on Wednesday.

The decision follows a call between Trump and representatives from the automakers, who sought relief from the sweeping tariffs. These companies rely heavily on the trade framework established under the United States-Mexico-Canada Agreement (USMCA).

Temporary Reprieve, But No Long-Term Exemptions

White House Press Secretary Karoline Leavitt stated that the exemption aims to provide the automakers time to shift investments into the U.S.

“Reciprocal tariffs will still take effect on April 2,” she said, “but at the request of USMCA-related companies, the president is granting a one-month exemption to prevent an economic disadvantage.”

Trump has long advocated for strengthening domestic auto manufacturing and has framed the tariffs as a way to encourage companies to relocate production to the U.S.

“He made it clear that automakers should start investing in America to avoid tariffs altogether. That’s the ultimate goal,” Leavitt added.

While Trump has left the door open for additional exemptions—such as for egg imports to address shortages linked to bird flu—he emphasized that the broader reciprocal tariffs set for April 2 will not be waived.

Pushback from Canada and Industry Leaders

U.S. Commerce Secretary Howard Lutnick hinted at the possibility of a compromise with Canada and Mexico but stated that complete tariff removal was unlikely. Instead, a resolution might involve certain carve-outs for automakers that comply with USMCA’s manufacturing requirements.

However, Ontario Premier Doug Ford and Canadian Prime Minister Justin Trudeau have firmly rejected any partial agreements, insisting on a full tariff rollback.

“There’s no such thing as half-pregnant,” Ford said. “We either have zero tariffs, or we move forward with our own response.”

Ford expressed concerns that the temporary nature of the exemption creates uncertainty for businesses, warning that the auto industry could face significant disruptions.

“Thirty days is not enough if the goal is to move operations south of the border. That’s unacceptable,” he said.

Impact on North American Auto Industry

The Canadian Vehicle Manufacturers’ Association welcomed the exemption but stressed the need for a long-term solution that recognizes the deeply integrated North American supply chain.

Industry leaders and labor unions voiced frustration over the ongoing uncertainty.

“The only thing that has changed is that Trump realized these tariffs were about to bring the U.S. auto sector to a grinding halt,” said Lana Payne, president of Unifor, which represents over 22,000 Canadian autoworkers.

Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, criticized the back-and-forth tariff policies, calling them unpredictable and damaging to the industry.

Looking Ahead

Trump has also announced a separate 25 percent tariff on steel and aluminum imports, set to take effect on March 12. These measures are expected to further strain the highly interconnected North American auto sector, where components frequently cross borders at multiple stages of production.

Despite the uncertainty, Trump remains firm on his position, stating that his policies will lead to a resurgence in U.S. auto manufacturing. He highlighted recent investments by automakers, including Honda, in new U.S. production facilities.

The Canadian government, meanwhile, has committed significant funding to attract automakers to build electric vehicle and battery manufacturing plants in Ontario, securing billions in investment from Stellantis, Volkswagen, Ford, and Honda.

Trump has previously accused Canada of “stealing” auto jobs through government incentives, arguing that past U.S. leadership failed to prevent the shift in manufacturing.

“They stole it because our people were asleep at the wheel,” Trump said in February.

With the one-month exemption in place, industry stakeholders are now watching closely to see if further negotiations will lead to more permanent trade solutions.