President Donald Trump has given Canadian and Mexican car importers a one-month reprieve from his newly implemented tariffs. General Motors, Ford, and Stellantis executives requested this delay, which requires their offshore operations to move to United States facilities by April 2.
Politico first broke the news about the short-term tariff exemption, which emerged soon after Trump announced 25% duties on all Canadian and Mexican imports under the U.S.-Mexico-Canada Agreement (USMCA), which functions as a modernized version of NAFTA. The Wall Street Journal reports that companies following USMCA regulations will obtain the temporary relief.
The Big Three automakers, together with other manufacturers, operate extensive supply chains across Canadian and Mexican manufacturing sites. The GM automotive plant manufactures Chevy Equinox models across both Canada and Mexico, and Ford operates its Lincoln Nautilus SUV manufacturing facilities in Ontario. The Stellantis company builds Dodge Chargers through its Canadian manufacturing operations. Multiple companies operating as suppliers maintain their manufacturing operations beyond the borders of the United States.
Vehicle prices are expected to increase due to the recently imposed tariffs. According to Jeff Schott from the Peterson Institute for International Economics, prices could increase by $12,000, which would decrease market demand and create unsellable inventory at dealership locations.
During a Tuesday congressional speech, Trump ordered automakers to move their production facilities to the United States, according to White House press secretary Karine Jean-Pierre, who said, “He told them that they should get on it.”
The Ford CEO, Jim Farley, raised doubts about fast plant relocations because U.S. facilities lacked enough production capacity. Ford declared its ongoing dedication to American manufacturing investments along with USMCA compliance. The upcoming weeks will be crucial for automakers to adjust their operations since Mexico and Canada contribute 25% of U.S. vehicle sales.