At a press briefing on March 5, White House Press Secretary Karoline Leavitt said President Donald Trump will grant an exemption for vehicles covered by the United States-Mexico-Canada Agreement (USMCA) from newly imposed tariffs on Mexico and Canada for one month.
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“We spoke with the [Detroit] Big Three auto dealers, we are going to give a one-month on any autos coming through USMCA. Reciprocal tariffs will still go into effect on April 2nd, but at the request of the companies associated with the USMCA, the president is giving them an exemption so they are not at an economic disadvantage,” the press secretary said.
Leavitt later confirmed that the requests came from the leaders of Stellantis, Ford and General Motors, later adding that the president told the respective auto CEOs “to start investing, start moving — shift production here to the United States of America where they will pay no tariff.”
The White House Press Secretary confirms that a one month exemption to the 25% tariff on Canada and Mexico has been put in place for autos, at the request of the big three automakers who talked with Trump last night #cdnpoli pic.twitter.com/ghLXhAj9Sl
— Mackenzie Gray (@Gray_Mackenzie) March 5, 2025
Detroit Big Three leaders warn of strategy implications
The latest move comes as leaders from the Big Three signaled significant danger in lieu of the cross-border tariff moves.Â
Ford (F)  CEO Jim Farley has been outspoken about the tariff’s impact, warning if imposed long-term, “a 25% tariff across the Mexico and Canadian border will blow a hole in the U.S. industry that we have never seen.” However, during Ford’s Q4 2024 earnings call, he noted that simply shifting production from Mexico, Canada, and other countries would be an expensive endeavor since its domestic plants are at capacity.Â
“[…] our U.S. plants are busy. Like we do not have upside,” Farley said. “[…] our teams in the U.S. are flat out already. So there’s not — I mean, we would have to make some major strategy shifts in the U.S., build new plants, etc., if this persists.”
Related: Here’s how new tariffs will crash the American car industry
In recent remarks, General Motors (GM)  CFO Paul Jacobson noted that the automaker won’t feel the effects of temporary tariffs but will have to consider relocating assembly plants if they become somewhat permanent; a costly feat that it doesn’t see the value of if tariffs eventually get lifted.Â
“If they become permanent, then there’s a whole bunch of different things that you have to think about in terms of, where do you allocate plants, and do you move plants, etc.,” Jacobson said at a Barclays conference. “Those are questions that just don’t have an answer today because I can tell you, as much as the market is pricing in a big impact of tariffs and lost profitability, think about a world where, on top of that, we’re spending billions of capital, and then it ends.”
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During Stellantis’s (STLA)  latest earnings call, Elkann said that tariffs affecting Canadian and Mexican production is a step too far. As a solution to help boost American manufacturing, the chairman suggested that Trump focus on imported vehicles that do not contain any American parts.
“[…]the real opportunity set for the administration in order to really boost jobs in America and manufacturing opportunities and investments is by closing the loophole that currently allows approximately 4 million vehicles into the country with any US content,” he said.
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