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Donald Trump has handed carmakers a one-month reprieve on tariffs on imports from Mexico and Canada, the White House said, in the latest last-minute policy shift to roil corporate America.
White House press secretary Karoline Leavitt said the US president had spoken with Stellantis, Ford and General Motors on Wednesday.
Leavitt added that the exemption would apply to cars complying with the terms of the 2020 trade deal between the US, Mexico and Canada.
“The president is giving them an exemption for one month so they are not at an economic disadvantage,” Leavitt said.
The carve-out comes after markets reacted turbulently to the Trump administration’s imposition 25 per cent tariffs on imports from Canada and Mexico, and an additional 10 per cent levy on China, on Tuesday.
At one point, all of the S&P 500’s post-election gains were wiped out, before the index regained ground.
Tariffs on Mexico and Canada are seen as particularly punitive for the auto industry because of the complex supply chains that criss-cross North America.
Trump’s tariffs have triggered an escalating North American trade war, with Canada responding with steep levies of its own on all US imports. Mexico has said it plans to announce its response on Sunday.
Leavitt suggested that more industries would be able to make the case for carve-outs from the tariffs, saying that Trump was “open to hearing about additional exemptions”.
“He always has open dialogue, and he’ll always do . . . what’s right, what he believes is right for the American people,” she added.
But Leavitt said that Trump’s “reciprocal” tariffs would still go into effect on April 2 as planned.
“He feels strongly about that, no matter what, no exemption,” she said. “So that’s where the one month comes from.”
Trump had told companies “get on it” and begin shifting their production to the US, Leavitt said. “That’s the ultimate goal.”
Earlier on Wednesday, US commerce secretary Howard Lutnick said Trump would “consider” relief for certain sectors.
But he reiterated the Trump administration’s complaints that Mexico and Canada had failed to clamp down on the trafficking of the deadly opioid fentanyl and suggested that any reprieve could last just a month.
Shares in US carmakers jumped on Wednesday, with Ford gaining 5.1 per cent, General Motors up 6 per cent and Stellantis’s US-listed depository receipts soaring almost 9 per cent. Other groups also gained, with Wall Street-listed depository receipts in Japan’s Toyota rising 6 per cent.
