U.S. President Donald Trump has announced a one-month tariff exemption for vehicles traded under the Canada-U.S.-Mexico Agreement, providing temporary relief to the auto industry. This exemption, effective from April 2, follows requests from the Big Three automakers—Stellantis, Ford, and General Motors—who sought relief from the 25% tariffs imposed by the administration. The exemption is limited to vehicles traded under the agreement and does not extend to all vehicles.
The rationale behind this temporary relief is to prevent automakers from being placed "at an economic disadvantage," according to the president. Linda Hasenfratz, executive board chair at Linamar, highlighted the significant impact of the tariffs, describing them as the "elephant in the room." Hasenfratz noted that customers could face costs in the billions if tariffs remain, potentially shutting down the industry. To mitigate this, Linamar has been stockpiling inventory in the U.S., allowing customers to buy tariff-free for now.
"The cost of these tariffs, notably, if steel and aluminum tariffs are layered on top, would be enormous. The cost for our customers would be in the billions and is ultimately likely to shut the industry down," – Linda Hasenfratz
However, not everyone is convinced that this temporary reprieve will bring significant change. Lana Payne, national president of Unifor, expressed her skepticism, stating that the extension "doesn’t really change anything." Payne emphasized that her members lack reassurance due to other tariffs announced by Trump, including those on steel and aluminum imports starting March 12.
“Round and round we go, where we stop, nobody knows,” – Flavio Volpe
David Adams, president of Global Automakers of Canada, echoed concerns about ongoing uncertainty in the industry. He acknowledged that while a one-month reprieve "is better than no reprieve," it leaves the industry grappling with unpredictability. Adams likened the situation to "trying to nail Jell-O to the wall," given its ever-changing nature.
“This whole exercise is a little bit like trying to nail Jell-O to the wall because we’re dealing with something that is shape-shifting all the time,” – David Adams
Ford spokesperson Said Deep expressed appreciation for the exemption and praised President Trump's efforts to support the industry. Deep emphasized Ford's commitment to maintaining open communication with the administration to secure a prosperous future for the auto sector and U.S. manufacturing.
“We will continue to have a healthy and candid dialogue with the Administration to help achieve a bright future for our industry and U.S. manufacturing,” – Said Deep
