In the aerial view, a new Subaru car in Richmond, California sits on March 4, 2025 in a storage lot in the car warehouse.
Justin Sullivan | Getty Images
On Wednesday, the White House announced a month’s North American tariff exemption for automakers after President Donald Trump met a day ago. General Motors, Ford Motor and Stellantis.
The automaker urged Trump to abandon 25% tariffs in Mexico and Canada on vehicles complying with the US-Mexico-Canada agreement trade rules.
“The mutual tariffs will come into effect on April 2, but at the request of businesses related to the USMCA, the president has given them a month’s exemption, so it’s not a financial disadvantage,” news chief Karoline Leavitt said on behalf of Trump.
The American Automotive Policy Council, a trade group representing the “Big 3” Detroit automaker, praised Trump’s decision for its recognition that vehicles and parts that meet USMCA content requirements should be exempt from these duties.
Leavitt said the president is “open” to hear requests from other industries seeking exemptions.
Leavitt also confirmed that the “Big 3” Detroit carmaker requested a call with Trump on Tuesday.
Two sources on Wednesday confirmed that GM CEO Mary Barra, Stellantis Chairman John Elkan, Ford CEO Jim Farley and Ford Chairman Bill Ford were on the call.
The White House said the car has granted a month’s delay on tariffs on USMCA-compliant car manufacturers.
GM, Ford, Stellantis stock
Shares in GM, Ford and Stellantis rose particularly following the announcement. Stellantis rose 9.2% on Wednesday, GM rose 7.2% and Ford rose 5.8%.
The White House on Thursday confirmed that the one-month exemption includes auto parts, accessories and other supplier products in addition to the completed vehicle.
It is unknown if there is any input. Tesla CEO Elon Musk had about tariffs or delays. After campaigning for Trump, Musk was one of his closest advisors and was almost constant on his side.
The exemption will allow additional preparation and discussion between the White House and the automotive industry regarding tariffs. It also aligns more closely with potential vehicle duties on imports from outside North America.
Trump previously said these tariffs will be confirmed on April 2 by pushing automakers to invest more in the US for vehicle production.
“We’re going to grow in the automotive industry like no one has seen it,” Trump said Tuesday night before a joint session in Congress. “It’s a combination of election victory and tariffs.”
Trump mispromoted “new” plant investment in Indiana Honda Motor During his speech on Tuesday night. The company operates large assembly plants in the state, but its recent major investments are in Ohio.
President Donald J. Trump will address a joint Congressional session on Tuesday, March 4, 2025 at the Capitolville House Chamber of Commerce in Washington, D.C. as Vice President J. D. Vance and Speaker of the House (R-LA).
Javin Botsford | Washington Post | Getty Images
Honda on Wednesday thanked its president for acknowledging the company, but confirmed that it “did not announce plans for a new US factory at this time.”
“We have invested more than $3 billion in advanced vehicle manufacturing in the United States over the past three years, with a cumulative total of over $24.7 billion,” Honda said in an email. “Like Honda has done for the past 45 years, we look forward to continuing to invest in our local area and build quality products in the US.”
Earlier this week, the American Automobile Policy Council argued that vehicles and parts that meet USMCA requirements should be exempt from increased tariffs.
There was a great concern among automotive executives and experts that as soon as tariffs lingered, they would eat into the profits and production plans of the company.
On Wednesday, executives of France-based automotive supplier Forvia said the company, including the automaker, and its customers, are planning different tariff contingency plans. This includes working with customers to reach parts contracts since the 25% tariff came into effect Tuesday.
“The entire supply chain cannot be swallowed 25%,” Forvia CEO Martin Fischer said at a media event. “If tariffs continue for a long time, cars become more expensive for consumers.”
S&P Global Mobility on Tuesday predicts that a 25% tariff will reduce approximately one-third of vehicle production in North America by next week.
The data and forecasting company averages 63,900 lightweight passenger cars in North America per day, with 25 automakers. Most of them, about 65%, are assembled in the US, followed by 27% in Mexico and 8% in Canada.
