U.S. automakers to get a one month exemption before tariffs take effect

FILE – President Donald Trump (AP Photo/Mark Schiefelbein)

President Trump is giving a one-month exemption to U.S. automakers from the tariffs that took effect on March 4.

CBS News reports that the announcement comes after Trump spoke with leaders of Ford, General Motors and Stellantis, the parent company of Chrysler, Dodge, Jeep and Ram, the White House said.

Trump’s 25% tariffs on all goods imported from Canada and Mexico, as well as an additional tariff of 10% on Chinese imports, were expected to hit the auto industry hard because many vehicle parts and components are imported from those countries, even if the cars themselves are made in the U.S.

Trump negotiated what’s called the U.S. Mexico Canada Agreement on trade during his first term in the White House.

“Since President Trump’s successful USMCA was signed, Ford has invested billions in the United States and committed to billions more in the future to both invest in American workers and ensure all of our vehicles comply with USMCA,” Ford said in a statement. “We will continue to have a healthy and candid dialogue with the administration to help achieve a bright future for our industry and U.S. manufacturing.”

In its own statement on the tariff delay, GM said the automaker “has more vehicle assembly plants in the U.S. than any other automaker,” adding that “we continue to invest billions of dollars every year in our manufacturing base, supply chain and U.S. jobs.”

The goal of the tariff pause is to give U.S. automakers time to shift their supply chains to within the U.S.

The Trump administration has said the tariffs are aimed at curbing the flow of migrants and drugs such as fentanyl into the U.S., as well as redressing trade imbalances with other countries. The taxes quickly triggered retaliatory measures by Canada and China, with Mexico planning to announce its response on Sunday.

The new tariffs Canada and Mexico could drive up car costs by as much as $12,200 for some models, according to a report from Anderson Economic Group (AEG), a Michigan-based economic consultancy.

— CBS News