Synopsis
On March 6, the White House announced that President Trump is granting a one-month exemption from 25% tariffs to major automakers Ford, General Motors, and Stellantis for imports from Mexico and Canada, amid concerns about economic impacts.Key Takeaways
- Trump grants a one-month exemption to major automakers.
- Tariffs of 25 percent will still take effect on April 2.
- USMCA requires specific sourcing rules for duty-free treatment.
- Economists are concerned about the economic impact of the tariffs.
- The Tax Foundation estimates job losses and income reduction.
Washington, March 6 (NationPress) The White House has announced that US President Donald Trump is offering a one-month exemption to three leading automakers from the recently initiated 25 percent tariffs targeting products from Mexico and Canada.
"We discussed with the big three auto manufacturers, and we will grant a one-month exemption on vehicles entering through USMCA. The reciprocal tariffs will still be implemented on April 2," stated White House Press Secretary Karoline Leavitt during a press briefing on Wednesday.
Leavitt mentioned that Trump had communicated with Ford, General Motors, and Stellantis, who made this request, according to reports from the Xinhua news agency.
The President approved the one-month tariff exemption for these companies.
Earlier on Wednesday, Bloomberg News reported that Trump is offering automakers a brief reprieve from the newly enacted tariffs on imports from Mexico and Canada, following appeals from industry leaders.
The United States-Mexico-Canada Agreement (USMCA) is a trade deal established during Trump's first administration, designed to supersede the previous North American Free Trade Agreement (NAFTA).
Under the USMCA, specific rules regarding the procurement of auto parts must be met to achieve duty-free status. These regulations are intended to promote regional production and sourcing within North America. For passenger vehicles and light trucks, at least 75 percent of the vehicle's value must be sourced from North America, while the requirement for heavy trucks is 70 percent.
On February 1, Trump enacted an executive order imposing a 25 percent tariff on goods imported from Mexico and Canada, along with a 10 percent tariff increase on Canadian energy products. On February 3, he announced a 30-day postponement of the tariffs on both nations while negotiations continued. Consequently, the relevant tariff measures became effective on March 4.
During a speech to a joint session of Congress on Tuesday night, Trump defended his tariff policies, acknowledging they may cause "a little disturbance".
However, economists and analysts have raised significant concerns regarding the potential effects of these tariffs on the US economy.
The Tax Foundation projected that, without accounting for retaliatory actions, Trump's 25 percent tariffs on Canada and Mexico, which took effect on Tuesday, could lower long-term GDP by 0.2 percent, decrease hours worked by 223,000 full-time equivalent jobs, and reduce after-tax incomes by an average of 0.6 percent.
