U.S. President Donald Trump is offering a one-month exemption on the new tariffs on imports from Mexico and Canada for U.S. automakers, according to White House press secretary Karoline Leavitt. The decision comes after Trump spoke with leaders of the Big Three automakers, Ford, General Motors, and Stellantis on March 5, 2025.
Trump’s imposition of 25% tariffs on all goods imported from Canada and Mexico, as well as an additional tariff of 10% on Chinese imports (that went into effect on March 4th), were expected to disrupt the U.S. auto industry because many vehicle parts and components are imported from those countries to manufacture cars in the U.S.
“People are going to lose their jobs,” Ontario Premier Doug Ford said in a statement to the Associated Press. “The auto sector in the U.S. and Canada would last approximately 10 days before they start shutting down assembly lines.”
In a statement read by Leavitt, Trump said, “We spoke with the Big Three auto dealers, and we are going to give a one-month exemption on any autos coming through USMCA,” referencing the North American free trade agreement he renegotiated in his first term.
The goal is to give U.S. automakers time to shift their supply chains to within the U.S. When asked if 30 days was enough for the auto industry to prepare for the new tariffs, Leavitt said, “Trump told them that they should get on it, start investing, start moving, and shift production here to the U.S. where they will pay no tariff.”
This pause only delays a broader reckoning set to happen on April 2nd, when Trump plans to impose reciprocal tariffs to match taxes and subsidies that other countries charge on U.S. imports. Leavitt said the president is “open” to hearing requests from other industries for exemptions as well.
Aluminum Industry Reacts to Proposed Tariffs
Price premiums for aluminum on the physical market in the U.S. have surged to a record high due to the looming threat of tariffs on imports of the metal used in the transport, construction and packaging industries, according to Reuters. North America’s aluminum industry and its customers are scrambling to figure out how business will be affected after the imposed import duties on Canadian and Mexican supplies. Imports of aluminum articles and derivative aluminum articles from Argentina, Australia, Canada, Mexico, EU countries, and the U.K. shall be subject to the revised tariff rate of 25% starting on March 12, 2025, according to a white house press release.
Meanwhile, in a statement issued by Charles Johnson, president of the Aluminum Association, he recommends that “President Trump should exempt the aluminum metal supply needed for American manufacturers while continuing to take every possible action at the U.S. border against unfairly traded Chinese aluminum. Thanks to robust domestic demand and coming investment, the U.S. aluminum industry needs a steady and predictable supply of primary, secondary and scrap aluminum.
“Today, much of that metal comes from North American trading partners, especially Canada. The U.S. industry sources around 2/3 of the primary aluminum it uses every year from Canada, since all U.S.-based smelters, even running at full capacity, cannot produce nearly enough metal to meet demand. And about 90% of U.S. scrap imports come from either Canada or Mexico. It would take billions of investment over decades to make the United States fully self-sufficient for its metal needs.”