United States President Donald Trump announced a temporary exemption for carmakers from a new 25% import tax on vehicles from Canada and Mexico, just a day after the tariffs took effect.
Despite this decision, Trump continued to criticize Canada for not doing enough to curb drug trafficking into the U.S.
“Nothing has convinced me that it has stopped,” Trump wrote on social media after speaking with Canadian Prime Minister Justin Trudeau about the economic disruption caused by the new trade tariffs.
News of the relief boosted U.S. shares, which closed higher after two days of declines that had erased the S&P 500’s gains since the November presidential election.
The tariff exemption applies to cars made in North America that meet the continent’s existing free trade agreement requirements.
The deal, negotiated by Trump during his first term, outlines the percentage of a vehicle that must be manufactured in each country to qualify for duty-free status.
White House press secretary Karoline Leavitt said Trump approved a one-month tariff exemption for the car industry after appeals from Ford, General Motors, and Stellantis, whose supply chains span North America.
Analysts at S&P Global Mobility warned that the new tariffs—taxes on imported goods—could disrupt a third of North American car production within a week.
“The president is open to hearing about additional exemptions,” Ms Leavitt added. “He always has open dialogue and he’ll always do what he believes is right for the American people.”
Ford shares jumped over 5% following the announcement, while General Motors gained more than 7%. Stellantis shares in the U.S. saw an increase of over 9%.
Billions of dollars in goods cross the U.S., Canada, and Mexico borders daily, reflecting the deep integration of their economies.
