AGENCY
washington, Mar 6
US President Donald Trump gave tariff exemption for a month to three automaker giants who comply with the United States-Mexico-Canada Agreement (USMCA), according to The White House.
Ford, General Motors and Stellantis were given the exemptions after they pleaded with Trump. All three auto companies have supply networks all across North America.
White House Press Secretary Karoline Leavitt said during a briefing Wednesday afternoon that the move comes after they asked for help. She added that Trump gave them an exemption for a month to ensure they were not at an economic disadvantage. Leavitt said the purpose of the reprieve is to give automakers time to “shift production here to the United States of America where they will pay no tariff. That’s the ultimate goal.”
The USMCA was signed during Trump’s first term to support mutually beneficial trade leading to freer markets, fairer trade, and robust economic growth in North America.
She later added that Trump is open to other carve-outs. Trump’s decision to give exemptions could be a silver lining for pickup-truck makers and for their leading customers, from rural US who mainly favour Trump, Reuters quoted Global Data. Pickup trucks are the backbone of the American auto industry, with the three auto giants mentioned above making the most profit from the sale of Jeep and Ram truck brands.
As per estimate, over 3 million U.S. pickups were sold last year, about 20% of overall national sales. This includes both US and foreign makers.
Despite the exemption, the tariff is likely to affect GM’s Chevrolet and GMC pickups, along with Stellantis’s Ram as they have both built a large number of pickups in Mexico. Ford, on the other hand, builds its F-series pickups in the United States though it also makes some truck engines in Canada. Almost no American vehicle is made from solely American parts, industry research shows.
Ohio dealer Rhett Ricart, who sells GM and Ford vehicles, hoped this would avert a crisis. “I think it won’t take a month for them to figure out how to handle this thing,” he said. “I’ll be more concerned … 30 days from now.”
Flavio Volpe, the head of Canada’s Automotive Parts Manufacturers’ Association, told the Financial Times that the exemption would not resolve the matter for businesses and workers fearful of job losses and plant closures. “No one can operate under 30-day threat cycles, including especially American businesses. Evidence of this is the fact that it was American businesses who requested this reprieve, not Canada or Mexico,” Volpe added.
