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Trump administration announces one-month tariff exemption on cars coming through Usmca

Published: 06 Mar. 2025, 10:23 Updated: 06 Mar. 2025, 14:12

U.S. President Donald Trump speaks in the Roosevelt Room of the White House in Washington, D.C., on March 3. [AFP/YONHAP]

U.S. President Donald Trump has decided to give a one-month tariff exemption on vehicles coming into the United States through a trade agreement between the United States, Mexico and Canada, the White House spokesperson said Wednesday, a decision meant to support U.S. automakers.

Karoline Leavitt, the spokesperson, made the announcement, after Trump held a call with the leaders of the big three automakers — General Motors, Ford and Stellantis.

The exemption decision came after 25 percent tariffs on Canadian and Mexican goods — with a carve-out for Canadian energy to be taxed at 10 percent — went into effect on Tuesday, following a one-month pause that Trump agreed to as the two countries pledged to bolster efforts to prevent cross-border drug trafficking.

"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," Leavitt told a press briefing, referring to the U.S.-Mexico-Canada Agreement.

Usmca is a free trade agreement between the three countries, which supplanted the North American Free Trade Agreement. Trump signed it into law in 2020 during his first term, as he had sought "fairer and more reciprocal" trade for Americans.

During the briefing, Leavitt reiterated that the United States will impose country-by-country reciprocal tariffs on April 2, which will be pegged to trading partners' tariffs and non-tariff barriers.

The Trump administration also plans to announce auto tariffs on April 2, in what could be a direct setback to the Korean automotive industry.

The president has been using tariffs as a key tool to pare down America's trade deficit, boost domestic manufacturing and achieve other policy goals, including preventing the inflow of unauthorized migrants and drugs, including fentanyl.

Yonhap