Trump Tariffs Continue, but Automakers will See Relief

Researched by Industrial Info Resources (Sugar Land, Texas)--Although President Donald Trump's tariffs against goods imported from Canada, Mexico and China remain in place, the U.S. administration has paused tariffs for automobiles compliant under the United States-Mexico-Canada Agreement (USMCA). However, there are no indications that will be enough to get Canada to alter its retaliatory measures.

Trump on March 4 implemented a 25% tariff on most imports from Canada and Mexico; 10% tariff on all U.S. imports of Canadian energy; and 20% tariff on goods from China.

The USMCA requires that 75% of a vehicle's parts must be made in North America to avoid tariffs when finished products move across the border.

"We are going to give a one-month exemption on any autos coming through USMCA," U.S. Press Secretary Karoline Leavitt said in a White House press briefing Wednesday afternoon. "But 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."

This came after Trump spoke with executives at the "Big Three" automakers: Stellantis (NYSE:STLA) (Amsterdam, Netherlands), Ford Motor Company (NYSE:F) (Dearborn, Michigan) and General Motors (NYSE:GM) (Detroit, Michigan).

Leavitt said the goal is to give U.S. automakers time to shift their supply chains to within the U.S. Trump "told them they should get on it, start investing, start moving, shift production here to the U.S. of America, where they will pay no tariffs," she said. "That's the ultimate goal."

The press secretary also said Trump may consider relief on other goods. When asked about the price of eggs in the U.S., she said "the president is open to hearing about additional exemptions."

However, after speaking with Canadian Prime Minister Justin Trudeau, Ontario Premier Doug Ford said the exemption was not good enough. "We're on the same page, zero tariffs, and we are not going to budge," Ford said Wednesday after a cabinet meeting.

Trump and Trudeau spoke for around 50 minutes Wednesday morning; however, there were no indications the conversation could lead to a pause, or outright halt, of the tariffs.

The president has cited the cross-border flow of immigrants and illicit drugs, such as fentanyl, and national security concerns as the reasons for the tariffs.

"The call ended in a 'somewhat' friendly manner!" Trump said in on his Truth Social media platform, before adding he didn't feel outgoing prime minister Trudeau was doing enough to combat the flow of fentanyl. He also said he could not get an answer regarding when Canada's election will take place. Three minutes later, Trump accused Trudeau of maintaining "Weak Border Policies, which allowed tremendous amounts of Fentanyl, and Illegal Aliens, to pour into the United States."

The leader of the Liberal Party, Trudeau in January announced his resignation due to inner party turmoil and loss of polling support. A new party leader is expected to be announced March 9, after which the leader-elect will be sworn in and announce the date for a federal election. A swearing-in date has yet to be announced.

Canada on March 4 responded to Trump's tariffs by including 25% tariffs against $155 billion of American goods--starting with an immediate tariff on $30 billion worth of goods, and tariffs on the remaining $125 billion on American products in 21 days' time. They will remain in place until the U.S. tariffs are withdrawn.

Of particular note is the 10% tariff on Canadian energy imports, including crude oil and electricity, which threatens to impact the flow of energy between the country and the U.S. For more background on the tariffs on Canada, Mexico and China, see March 4, 2025, article - Trump Tariffs Take Effect, and Retaliation Ramps Up.

But Greg Ebel, chief executive officer of Enbridge Incorporated (NYSE:ENB) (Calgary, Alberta), said Tuesday it would take time for the tariffs on Canadian oil to alter the amount of crude the U.S. imports from Canada. Approximately 90% of Canada's crude oil exports go to the U.S.

Meanwhile, the Canadian Association of Petroleum Producers (CAPP) said it is "deeply disappointed" in the tariffs. "Canadian oil and natural gas producers have demonstrated they are innovative and resilient and will find the best ways to mitigate the impact of tariffs and realign themselves to thrive in a dynamic global market."

In terms of the U.S.' southern counterpart, Mexico's President Claudia Sheinbaum said in a press conference Wednesday she is scheduled to speak with Trump on Thursday to discuss the tariffs, although she also said her country could seek out other trade partners "if necessary." If tariffs remain in place, Mexico "will reach out to Canada and other nations," Sheinbaum said. The president has said she would announce retaliatory tariffs over the upcoming weekend.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).