The day after the introduction of duties on imports from Canada and Mexico, the White House announced that it would grant a one-month tax exemption to automakers who are parties to the USMCA agreement between the United States, Mexico and Canada.
The grace period for USMCA automakers was announced after a telephone conversation between the heads of General Motors, Ford Motor Company and Stellantis with US President Donald Trump, White House spokeswoman Caroline Leavitt said at a press conference on March 5.
"We are going to provide a one-month exemption for all vehicles passing through the USMCA... but at the request of the companies associated with the USMCA, the president grants them a one—month exemption so that they do not find themselves at an economic disadvantage," Leavitt said.
The latest statements come after Trump imposed tariffs on the United States' closest neighbors, an action closely watched by the closely intertwined North American energy markets. On March 4, the United States imposed a 25% tariff on imports from Mexico and Canada, and energy products from Canada are subject to a 10% tariff.
In addition to import duties from Canada and Mexico, American automakers and energy project developers are facing duties on steel and aluminum, which will take effect on March 12.
Each of the car companies has previously expressed concern about the impact of tariffs on American automakers. Ford CEO Jim Farley said that maintaining tariffs would have "devastating consequences," with "billions of dollars of industry profits wiped out."
GM has previously stated that it is developing scenarios for responding to duties, but will not "spend large amounts of capital without clarity."
"We manufacture trucks in Mexico, Canada, and the United States, and we have the capacity in the United States to move some of that," GM CEO Mary Barra said in a January 28 earnings release. "We also sell trucks all over the world, and so we can look at where they come from to international markets."
John Elkann, chairman of the board of Stellantis, said that the USMCA "must remain duty-free" and that the first Trump administration "was very careful to ensure that the products we produce in Canada and Mexico had American content."
The White House also confirmed at a press conference on March 5 that retaliatory duties corresponding to those in force in other countries will take effect, as promised, on April 2.
President Trump "firmly holds the view that an extension is unacceptable under any circumstances," Leavitt said.
In his address to Congress on March 4, Trump once again emphasized his desire to impose additional duties.
"No matter what tariffs they charge from us, from others
