The White House has announced that US President Donald Trump is granting a one-month exemption to three major automakers from the newly imposed 25% tariffs on Mexico and Canada.

White House Press Secretary Karoline Leavitt confirmed the decision on Wednesday, stating, “We spoke with the big three auto dealers (makers), and we are going to give a one-month exemption on any autos coming through USMCA. Reciprocal tariffs will still go into effect on April 2.”

Trump agreed to the exemption after discussions with Ford, General Motors, and Stellantis, following their request for temporary relief, as reported by Xinhua news agency.

Tariffs under USMCA and their economic impact

The United States-Mexico-Canada Agreement (USMCA), enacted during Trump’s first term, requires auto parts procurement to meet specific regional content rules for duty-free treatment. Passenger vehicles and light trucks must have at least 75% North American content, while heavy trucks must meet a 70% threshold.

On February 1, Trump signed an executive order imposing 25% tariffs on imports from Mexico and Canada, along with a 10% tariff increase on Canadian energy products. A 30-day delay was announced on February 3, with tariffs officially taking effect on March 4.

During his joint session of Congress address on Tuesday, Trump defended his tariff strategy, acknowledging potential short-term disruptions but emphasizing the long-term benefits.

Concerns over economic impact

Economists and industry experts have voiced concerns over the tariffs’ effects on the US economy. According to the Tax Foundation, these tariffs could:

• Reduce long-term GDP by 0.2%
• Cut 223,000 full-time equivalent jobs
• Decrease after-tax incomes by an average of 0.6%

While Trump’s temporary exemption provides short-term relief for major automakers, ongoing negotiations and the potential for retaliatory measures leave uncertainty over the broader economic impact.