Tariff rollercoaster: Trump temporarily pauses Canada, Mexico levies for autos
The Trump administration is easing the newly imposed tariffs on North American allies, with an auto sector carve-out that exempts the industry from import taxes for one month.
Why it matters: It offers temporary relief to a business that heavily relies on free trade with Canada and Mexico.
But the announcement is also the latest bump in the tariff rollercoaster ride that is hamstringing some business activity and stoking inflation fears.
What they're saying: "At the request of the companies associated with USMCA, the president is giving them an exemption for one month so they are not at an economic disadvantage," press secretary Karoline Leavitt said at a White House press briefing on Wednesday.
Leavitt was referring to the United States Mexico Canada Agreement, the trade deal negotiated in Trump's first term. She said the requests came from top executives at Ford, Stellantis and General Motors.
Even with that exclusion, the 25% Canada and Mexico tariffs still cover a huge portion of other imports. The 20% tariff on Chinese imports remains unchanged.
The uncertainty about Trump administration policy leaves some companies in a bind. Executives don't know whether or when imports taxes will be called off.
What to watch: Speaking to reporters, Leavitt doubled down on tariffs as central to Trump's economic policy, signaling that automakers should make long-term plans to adjust.
"The reciprocal tariffs will go into effect on April 2, and he feels strongly about that no matter what — no exception, exemption," Leavitt said.
Leavitt said the president told the automakers "to start investing, start moving — shift production here to the United States of America where they will pay no tariff."
Between the lines: The White House has tried to distinguish between the various sets of tariff proposals — and how a trade spat might be resolved.
A White House official said the Canada, Mexico and China tariffs are about controlling the flow of fentanyl in the U.S., as opposed to the lumber tariff investigation that stems from national security concerns.
Yes, but: The temporary tariff relief comes even as Trump says he is dissatisfied with Canada and Mexico's actions on fentanyl.
"I told him that many people have died from Fentanyl that came through the Borders of Canada and Mexico, and nothing has convinced me that it has stopped," Trump posted on Truth Social, describing a conversation with Canadian leader Justin Trudeau.
"He said that it's gotten better, but I said, 'That's not good enough.'"
The intrigue: The volatility of Trump policy is on full display in the stock market, which has moved in lockstep with tariff news in recent days. Stocks turned positive after reports of the tariff reprieve.
Shares in the three automakers rallied sharply.
The bottom line: As recent days make clear, it's not just the actual tariffs that pose a risk to the economy, but the uncertainty of their implementation.
Commerce Secretary Howard Lutnick said the sectors spared from these tariffs might be roped into a broader tariff announcement in early April.
Editor's Note: This story has been updated with additional White House comments.
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